When the Affordable Care Act became law in 2010, Miami insurance agents Mercy Cabrera and Odalys Arevalo said they saw many of their colleagues turn to selling real estate rather than tackle the complicated new market. But Cabrera and Arevalo saw opportunity. They decided to start their own insurance agency, Sunshine Life and Health Advisors, to focus on a niche market: South Florida’s working class Hispanic communities.
Neither woman has extensive experience in health insurance. Arevalo, 47 had been a stay-at-home mom for 13 years, and Cabrera, 50, had worked previously in advertising sales. “It was rough, very rough,” Cabrera said, of breaking into the insurance business.
Their paths crossed at American General Life and Accident (AGLA), where they both sold AGLA life insurance products. Soon they were meeting for breakfast at the La Carreta restaurant in Kendall to talk about their careers.
“When the health law passed, I realized there was so much more I could accomplish,” Cabrera said. “We decided to focus on people who don’t have the means of traditional health insurance clients. We could have gone another route, but chose to focus on the ACA.”
With an idea, a network of friends and a cushion of financial support from their husbands’ jobs, the women left their jobs in 2011 to start the company.
The decision was risky in those early days of health reform. The National Association of Insurance and Financial Advisors (NAIFA), to which Cabrera belongs, opposed much of the ACA and hoped the 2012 presidential election would change or repeal it. Especially worrisome was the law’s requirement that insurers spend at least 80 cents of every $1 in premiums on healthcare — a rule that cut into the commissions agents could make.
NAIFA president John Nichols said many insurance agents reevaluated their jobs when they looked at the changes and saw more work in educating clients but less money in the end. He said they wondered: “If we continued with the same work loads but with less compensation, how would we deal with that?”
Some agents turned. away from selling health plans, he said.
But not all of them. A NAIFA survey reported that 56 percent of its members involved in health insurance intend to sell health plans through their state or federal marketplace.
Cabrera and Arevalo completed their training over the summer so they can sell insurance on the healthcare marketplace. Then they began holding free seminars at local churches to make people aware of their options under the health law. Far from a burden, Cabrera said the process of educating people who have never before had health insurance is what motivates her. Other agents have joined them — 84 at last count, including Arevalo’s son.
On a recent Wednesday at the Mall of the Americas in West Miami, a half-dozen prospects, all of them Hispanic, lined up at the Sunshine kiosk to speak with agents about health insurance. Hispanics account for over a third of the uninsured in Florida.
Arevalo opens a binder of lead sheets with prospects to call back when the Healthcare.gov online exchange is working. “So far we’ve only been able to enroll a handful because of the website,” she admitted. “When it’s fixed, we’ll be ready.”
She flips through the sheets of information. To the question, “Have you ever had health insurance?” all the answers read, “No.” The incomes range from $11,000 to $22,000, low enough to qualify many of the prospects for a government subsidy to defray the costs of insurance. One client, a 60-year old Ross employee earning $17,000 a year, was able to get a $623-a-month subsidy as well as cost sharing, Arevalo says.
The agency is also working with service and agricultural companies to enroll their part-time employees. With the subsidies, the plans are well-suited for people earning the minimum wage — generally, a full-time annual salary of $16,224, or $12,168, for those working 30 hours a week. Not all agents participating in the healthcare exchange are as focused on these clients as Arevalo and Cabrera.
Adam Clatsoff, president of Adcahb Medical Coverages in Coral Springs, has been selling insurance since 1969 to company CEOs and individuals with high net worth. Carmen Crespo, a board member of NAIFA’s Miami-Dade chapter, has 32 years in the business selling annuities and retirement planning as well as health coverage. Neither plans to change business models for the ACA, although both say they’re finding plenty of opportunities to sell the subsidized health plans.
“This is an open door for people who have never had insurance. You can make good money in the health insurance market — at least for the first year,” Crespo said.
Still, selling health plans in the age of reform represents a sea change for agents.
“The difference is humongous,” said Cabrera,. “In the old world , when the underwriter rejected people for coverage, we worked for free. If a client canceled his policy after his first physical exam, we worked for free again.”
Today, with a mandate for individuals to get coverage and no barrier for preexisting conditions, “This is a gold rush for people who want to help others,” Cabrera said.
Despite what Cabrera describes as “thousands of inquiries” about health insurance, she said the fledgling company has “barely made a dime” because of the extensive delays in fixing the Healthcare.gov website.
But their agents have made hundreds of appointments for November when enrollment is expected to be easier. And even if the website repairs extend into December, Cabrera said, “We’ll stick it out. We put all of our chips on the ACA.”