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“From an employee benefit standpoint, we’re all reading and you’re all hearing a lot about the individual exchanges, which officially opened on 10/01, either run by the federal government or by the state. As some of you may know, they are very difficult to get onto, if you’ve tried to sign up. The networks are very skinny, meaning choice is limited, that the price point comes with some sacrifice, meaning choice of doctors. And there continues to be questions around how really will those subsidies work in terms of tax credits.”
“The private label exchanges. We have a private label exchange, as we’ve talked about. And through September, we have 13 clients that have gone on to that exchange, about 1,300 lives. The smallest client is 27 in insured lives, and the largest is 400. We’re seeing employers are starting to allocate money from a defined contribution plan into specific medical bucket and then the all other or ancillary bucket”
“We are seeing a lot of insureds trying to renew early to retain the old underwriting philosophy prior to 01/01 of ’14, which would delay some of the things that would be implemented on their accounts until the latter part of next year as opposed to 01/01/14. And in the small community rating area, small groups with healthier groups are going to be hit the hardest from a rate increase come 01/01 of ’14.”
“I’d say that all carriers want rate increases, but the rate increases that they want are moderating. If there’s not a wind event this season, which we don’t believe there will be, cap property rates will start to go down on 12/01, more so than they currently are, and then definitely go down 01/01 of ’14.”
“As you know, there’s new capacity in the cap property market and that in itself, will put additional downward pressure on rates. The continued — the economy continues to bump along. The slowdown in Washington doesn’t help. I would say, in conclusion, on our clients’ views, they feel okay about the economy, but they are cautious about investing in — or making major capital expenditures on their businesses. Not much different from Q2.”
“the confusion around health care exchanges or just health care in general, ACA, has created great concern and anguish and yet great opportunity for us. So we’re writing a lot of new business. So I’m not aware of us losing an account to an individual exchange or anything like that at this time. That’s number one. Number — back to the first question is on those accounts, my understanding that the revenue is generally similar at present time. But as we get into it deeper and we have more on it, we’ll have better clarity on how that — if that were to affect our income stream and how it will. But right now, our understanding is it’s generally the same.”
“hurricanes hit Florida in waves. And usually, if you think about it, it’s every 10 to 12 years. And so it’s a while since we had the last storm, 2004 and 2005. And so as the markets continue to do well, i.e., have good rate online and not incur losses, it becomes more and more competitive and more people kind of crowd into the space.”
“I think there’s going to be a component of employers that are going to think about health care in this way, which would be, they’re going to identify the cost to provide a medium-level plan for their teammates. That doesn’t mean a Cadillac. That doesn’t mean a Yugo. That means kind of a mid — a Chevy option for their health care plan. Then they’re going to look at it as a defined contribution sum. Some adopters will look at it as a defined contribution amount. They take that amount and they will deposit it into — for sake of this discussion, knowing that you’re at Morgan Stanley or any other investment house, let say they invest — put that in an investment account. And then you, the individual employee, have the option to buy coverages based on your own desire or so called perceived medical need. So they may, in turn, allocate 60% or 70% of that income that’s contributed into that account to medical and the remaining to ancillary coverages. If you get your medical through your spouse, that money would not — you would not have access to that money unless you actually buy the medical through their plan. And the same with the ancillary. Then think of it as an allocation, like an asset allocation model. It’s a health care allocation model. Do you want to have disability coverage? How much? Do you want to have life insurance? How much? How much for health insurance? And think of it like a pie chart. And the biggest slice will be health care, and then a portion will be life and disability and vision and dental. I think that will only affect — I think the adoption rates will be slow. I think that there does run a scenario or there is a scenario that potentially comes out of this where certain employer groups think that health care then becomes the responsibility of the government as opposed to them. And they push that responsibility off, and now it’s just a contribution into this exchange, be it a private exchange or if they move certain people or groups of people that go to a state run individual exchange or federal exchange.
I think that you’ve seen some of that determination when you’ve read in the Wall Street Journal on some of these very large employers that are going to this — I’m going to call it a defined contribution plan, and only time will tell how those pan out. But our clients are very interested in continuing to provide quality health care options to their employees, and what we’re trying to do is bring those solutions to them and the best options to them across-the-board. I think that there is going to continue to be an evolution of products, Greg. And you heard the statement that I made about national health carriers providing or making products available that looked typically like self-insured products, which historically have been on the 100-plus life group down to the 50-plus life group. I do think there will be certain ancillary carriers that will develop products that will look and feel like a MiniMed product that may qualify, that could be on exchanges as well.”
“we say 3 things with certainty: Healthcare is expensive, it’s utilized and it’s confusing. And so, therefore, that creates an opportunity for us to work to the benefit of our clients, and so we think it’s an opportunity.”
“at present, it would be a net neutral. And I think we got to see because it’s so new relative to — meaning, you’re asking a question that’s going to play itself out as we put more clients on it and if that model evolves. So for example, right now, in those programs or on those exchanges it’s a single market. The risk bearer is one primary health carrier. That may evolve to multiple carriers where clients have choice, that’s currently not the case. So there are things that are still evolving. And as those evolve, that choice will not only be good for the client, but I think it will also be good for us relative to being compensated.”
“the exchange, which I look at as kind of a glorified enrollment front end. And so that additional cost is generally going to be passed through to the employer.”
“We focus on high quality people that run good businesses that have a cultural fit. So people say, “Well, what’s the cultural fit, as an example?” And there are 3 or 4 things that jump right out, which is how do people treat their teammates? How do people treat their clients? How do people treat their carrier partners? And how do they think about growing their businesses and investing in their businesses? All of those are kind of basic 1-2-3-type things we think about.”
“We make it real simple in the sense that in our businesses, when we grew organically, we believe that we have the opportunity for margin expansion. And as it relates to rate, rate, it comes with the territory. Whether it’s up, down or sideways, we grow our business when the rating environment is down slightly, but exposures are up. It happens to help that the rates are up. But in our business, we’ve always said, particularly even through the slowdown in the economy, that we believe that the impact when it was negative, that 2/3 to 3/4 of the impact was rate — I mean, it was exposure based, not rate.”
“I think there is a break between big companies and their view on the economy and their view on investing in large capital investments and the middle market. And so as I’ve said before, the middle market, if you’re going to have to buy a $3 million system, whatever that is for your business, and you’re a smaller business, you’re not as keen to go and borrow $3 million to buy that new piece of equipment as opposed to just try to maintain the equipment and buy the new one as the economy gets better. “