Selling Health Insurance 1973-2022

1973 – No such thing as Major Medical or “networks.” Indemnity plans only. No medical underwriting. Two year rate guarantee. $15 daily room allowance. Employee rate <$20. Family rate < $40. Growing government intervention with the passage of Medicare a few years prior. HMO’s begin.

1975 – New Major Medical umbrella could be added on top of indemnity plan. $250,000 limit. Add-on cost <$3. The first of hundreds to follow, Federal mandate requiring pregnancy to be covered as “any other illness.”

1975-1980 – PPO networks established. Indemnity plans replaced by pure Major Medical coverage.

1983 – PCS card adopted by a few commercial carriers to pay for prescription drugs. The beginning of the PBM industry.

1982-1995 – Golden age of health insurance brokerage. P&C agents and life insurance salesmen follow the money joining the health insurance brokerage gold rush. Commissions as high as 15%. Each renewal period brought higher commissions. Not uncommon to present +30 different insurance companies on renewal. Newly minted millionaire brokers enter the good life.

1995-2005 – Self funding becomes mainstream. Growth of the TPA market.

2007 – Birth of Reference Based Pricing. Battle royal with the BUCAs and their hospital partners. Few brokers pushed the strategy.

2007-2015 – Reference Based Pricing gains market traction. More brokers push the strategy.

2015-2022 – Intense government regulation of health care. Bonanza for lawyers. Fewer carriers in the market. Less choice in benefits. Punishing government sanctions for errant plan sponsors. New risk management strategies emerge including cash pay strategies.