Tag Archives: aarp

Dissecting Landmark Decision on Wellness

This is a follow-up to the announcement and “back story” of the Dec. 21 wellness decision in AARP vs. EEOC, a decision that could severely curtail incentives and penalties…and that could, to paraphrase the most memorable G-rated words ever spoken by Bill Clinton, end wellness as we know it.

That’s the bad news. The good news is that this decision may actually be a windfall for employers with wellness programs that use heavy incentives.

Q: What just happened?

AARP just won a very favorable district court ruling against the Equal Employment Opportunity Commission (EEOC), the agency charged with enforcing the Americans with Disabilities Act (ADA) and the Genetic Information Non-Discrimination Act (GINA). The full decision is here.

Q: How is this different from the previous ruling in AARP v. EEOC?

The original ruling, though in favor of AARP, gave EEOC more than three years to amend its rules to redefine “voluntary” to match the dictionary definition. The new ruling gives one year both for the EEOC to write the rules and for employers to implement the rules, and makes clear what is expected of them. Here  is the key to why this decision should stick:

The government can’t define “voluntary” to include fines of $2,000 or more for non-compliance if it also requires a “mandate” — the opposite of a voluntary option — that carries only a $695 penalty for non-compliance. A voluntary option can’t include remotely as high a penalty for non-compliance as a mandatory requirement, especially in the very same law.

See also: A Wellness Program Everyone Can Love  

Q: What will remain as of January 2019 that employers can require subject to forfeitures?

It is still OK to offer medical screenings and HRAs (collectively, “medical exams”) OR dangle incentives or fines (collectively “forfeitures”), just as it is today. The difference is that the programs involving required forfeitures can’t also require medical exams, which both the ADA and GINA say can only be “voluntary.” The court ruled that you can’t force employees to undergo “voluntary” exams by dangling or threatening to withhold large sums of money.

So you can still require employee forfeitures up to 30% (50% for smokers), and you can still offer medical exams. You just can’t combine the two. That’s because, in order for a wellness program to fall under ADA and GINA in the first place, medical exams must be involved. So, for example, requiring employees to either do screening or do Quizzify is still allowed.

Q: Does this cover screenings only, or are programs that combine annual physicals and forfeitures also affected?

A: If the results of the latter are not shared with the employer,  it appears that they may still be require-able. A better question is why an employer would want to require them. First, they lose money.  Second, they don’t appear to benefit employees, either. The New England Journal of Medicine, the Journal of the American Medical Association, Choosing Wisely and Consumer Reports (and also Slate) have all looked at the data and concluded that for most people annual physicals confer no net health benefit, meaning even if they were free they would be worthless. (People who have continuing health issues should, of course, see their doctor regularly. Those would not be considered checkups under this definition.)

Logically and intuitively, this conclusion would appear to be especially true when employees submit to those physicals under duress. Quizzify — and this question, like most Quizzify questions, carries the Harvard Medical School (HMS) shield — recommends two checkups in one’s twenties, three in one’s thirties, four in one’s forties, five in one’s fifties and for most people annually after that. However, this is also Quizzify’s most edited-out Q&A, as some employers nonetheless want even healthy employees to get physicals every year, and Quizzify respects that choice (though a customized question advocating it could not carry the HMS shield).

Q: These Q&As seem very Quizzify-centric.

A: That’s not a question, but I’ll answer it anyway. There are two reasons for that:

  1. We know of no other vendor that solves the problem and guarantees the solution, with EEOC indemnification. Quizzify was both conceived and designed in anticipation that this court decision would happen someday. (I just didn’t expect it to happen four days before Christmas, which meant a lot of my cousins got gift cards instead of ugly sweaters.) All my exposes on the wellness industry led me to conclude that conventional “wellness or else” (as Jon Robison calls it) could never survive a court challenge…and I designed a product specifically to allow employers to address that challenge immediately and completely.
  2. Those of you familiar with my work know I have only three talents in life: wellness outcomes measurement, employee health literacy/consumerism education and self-promotion.

Your vendor, Quizzify or not, should offer something like this right on their website. If they do, you’re safe:

Q: What other analyses should we be looking at?

The best is The Incidental Economist. AARP hasn’t released a formal statement, but its informal back story can be found at the bottom of this posting.

Q: So what should we do about it?

Simply add the option of taking Quizzify quizzes to the option of HRAs/screenings. That one-step fix is guaranteed and indemnified to solve your legal issues. It will also save money both up front (a year of Quizzify costs much less than a single screening) and down the road, because wiser employees make healthier decisions…and healthier decisions save money. Employees also like playing trivia more than they like being browbeaten into promising to eat more broccoli.

If your vendor refuses to add Quizzify via a “single sign on” and you don’t want to add it separately, you can fire the vendor (we can help you do that — if the vendor shows a positive ROI it means their outcomes are fabricated, which we can easily demonstrate) and replace them with one that will, of which there are more to choose from every week.

Q: What happens next?

A: The EEOC needs to rewrite the rules to comply with this decision by making new rules — and needs to do it in 2018 so that they can be adopted and implemented by employers by January 2019. The definition of “voluntary” will be a line-drawing exercise. Likely, gift cards and small incentives will be considered “voluntary.” If your incentive falls within whatever cap they decide upon already, you’re fine, with or without Quizzify.

Q: Is this is last word?

A: No.  First, the final rules have yet to be written. The rules then have to be approved by the district court.

Along with that uncertainty are two others. The EEOC could appeal, because these days it tends to oppose employee rights, rather than support them. However, the DC Appellate Circuit, led by Merrick Garland, would likely not be favorably disposed toward arguments that require, for example, defining “involuntary” as “voluntary,”  especially when the court will know that even award-winning vendors harm employees, vendors flout guidelines and screen the stuffing out of employees and give incorrect advice, creating further harms, and that the industry itself is rife with corruption, starting at the top. (I published my last paper in a medical-legal journal rather than a clinical journal specifically in anticipation that it might be the basis for an amicus curiae brief specifically in a situation like this.)

See also: Should Wellness Carry a Warning Label?  

In an unregulated, employee emptor environment like this, voluntary fines collected by shareholders from employees wanting to protect themselves from the harms above should not exceed fines set as penalties for a mandate, and paid into a pool to create an insurance product. (That the mandate is going away is not relevant — it’s the fact the government has two words with opposite meanings that have inverse fines.)

Alternatively, an Act of Congress could gut GINA. The American Benefits Council could try to convince the legislators their colleagues contribute heavily to, like Virginia Foxx (R-NC5), to push HR1313, for example. HR1313 is arguably the worst bill of any type ever to clear a congressional committee, in that nobody benefits from it (other than DNA collection vendors, for whom it would be a windfall), but the ABC has already demonstrated its disregard for the best interest of its own members by browbeating Rep. Foxx into proposing that bill in the first place. The ABC is down, but not out…and, as this video shows, being down but not out can cloud one’s judgment.

However, because quite literally none of her constituents are helped by this bill and most of them in both parties detest it, Foxx may decide to disappoint her corporate overlords on this one, especially because it’s an election year.

Q: How is HR1313 (or a bill like it) that ABC might propose on behalf of its members (large employers) not in “the best interest of its own members”?

A: Many employers have finally figured out that even their own vendors know wellness loses money, and that incentives generally don’t change behavior because employees revert to their old behaviors once the incentive ends. (Incentives do work for Quizzify-type programs, because, as you’ll see for yourself if you take the quiz, once you pay an employee to know things, she can’t un-know them. Pay an employee to learn that CT scans are full of radiation once, and he will stop demanding unnecessary CT scans forever.)

However, employers are stuck with these huge incentives now, which some employees expect annually. This rewrite of the “voluntary” rules, likely capping incentives in the low three figures, will allow employers to spend much less on incentives…and blame the government. (Obviously, we hope they maintain the incentives and instead just offer the Quizzify alternative. This will also save money due to Quizzify’s low price and a much-reduced number of employees having to follow up on false positives.)

If ABC were to be successful in gutting GINA and allowing financially coercive wellness programs to continue unabated, employers would still have to fork over large incentives.

The Stubborn Myths About Older Workers

When it comes to retirement, a significant cultural and demographic trend is taking place. Twenty-five years ago, only about one worker in 10 planned to stay in the workforce beyond age 65. Today, that number has risen to more than 50%. In fact, according to the 16th annual Transamerica retirement survey, 82% of 60-somethings expect to work or are already working past age 65.

Today’s boomers are not ready to stop working. They are better-educated, more physically fit than their parents and perhaps not as financially comfortable as they’d like to be. In short, they are defying stereotypes about an aging workforce and redefining retirement.

It’s not strictly a financial matter. “Money and access to healthcare are of considerable importance,” reports the AARP Public Policy Institute, “but so are the desires to remain active, make a contribution and maintain social relationships at work. Furthermore, these workers often enjoy what they are doing.”

Boomers are still working today at ages when their parents and grandparents had retired. This is particularly true in a service industry like insurance where physical strength is not an issue. Think of today’s 65-year-old worker as yesterday’s 50-year-old worker.

What is surprising is that few insurance firms have adapted to this new trend or have put policies and practices in place to accommodate today’s retirement reality.

Yet, when asked to name their greatest challenges, many insurance firms concede that finding and keeping qualified staff is at the top of their list and state that the loss of talented and experienced older workers is a key concern. This issue is further confirmed by the accounting firm PwC’s report that concludes the industry faces “a potentially massive loss of skilled, knowledgeable workers” as large numbers of older insurance workers approach their traditional retirement dates. The report notes that hiring millennials is only part of the solution and does not adequately address the transfer-of-knowledge issue.

See also: Why Are We Still Just Talking Diversity?  

Perhaps it isn’t so surprising after all. There remains a litany of stereotypes and negative perceptions to explain why firms tend to reject older workers, including:

  • Hiring managers tend to see older workers as more likely to be burned out, slow to accept or adapt to new technologies, more likely to miss work due to illness and poor at working with younger workers, especially younger supervisors; and
  • Many assume older workers are less creative, less productive, slower mentally and more expensive to employ than their millennial counterparts.

But current research negates these stereotypes:

  • According to a study this spring prepared by Aon Hewitt for AARP, “workers aged 50-plus can help employers address current and future talent shortages.” AARP and others have long argued that older workers are reliable, flexible and experienced and possess valuable institutional knowledge.
  • Writing in the AARP Bulletin on “The Value of Older Workers,” T.R. Reid reminds us that hiring skilled, vintage workers can be “a boon to employers, a boost for the U.S. economy and a bonus for the workers. For employers, the ‘unretired’ provide a pool of experienced labor that has proved to be productive, dedicated and loyal.”
  • One of last year’s blockbuster movies, The Intern, took notice of boomers reentering the workforce. Robert DeNiro played a septuagenarian whose experience and life skills help turn around the business run by the wonder-kid played by Anne Hathaway. His character pinpoints the reasons employers should want an older worker: “I’ve always been a company man,” he declares. “I’m loyal, I’m trustworthy and I’m calm in a crisis.”

Researchers at the University of Kentucky surveyed large and small companies to assess how employers evaluate their older workers. They uncovered seven perceived benefits of hiring older workers:

  1. Dedication to the organization
  2. Customer-service orientation
  3. Dependability
  4. High productivity
  5. Life experiences
  6. Strong work ethic
  7. Institutional knowledge

When it comes to actual job performance, Peter Cappelli, a management professor at the Wharton School of Business, is quoted in the AARP article, “The Surprising Truth about Older Workers,” as observing that older workers outperform their younger peers. “Every aspect of job performance gets better as we age,” he says. “I thought the picture might be more mixed, but it isn’t. The juxtaposition between the superior performance of older workers and the discrimination against them in the workplace just really makes no sense.”

Nathaniel Reade summarized Cappelli’s findings: “Older workers tend to be motivated by causes like community, mission and a chance to make the world a better place; younger workers are more driven by factors that directly benefit themselves, such as money and promotions. But perhaps the greatest asset older workers bring is experience — their workplace wisdom. They’ve learned how to get along with people, solve problems without drama and call for help when necessary.”

In a Sept. 18, 2015, U.S. News and World Report article, “5 Reasons Employers Should Hire More Workers Over Age 50,” Maryalene LaPonise suggests we “forget the myth that older workers are outdated and expensive. The best are loyal and competent and may even help a business’s bottom line.” She sees their experience, confidence, “relatability,” loyalty and ability to save companies money as the key reasons to hire older workers.

In a Brookings blog, World Bank economists Wolfgang Fengler and Johannes Koettl write, “A binary system of working 100% until retirement and then suddenly moving to 0% at an arbitrary age of around 65 is one of the great anachronisms of today’s labor market.” They argue the whole idea of a “retirement age” should be retired.

See also: How Should Workers’ Compensation Evolve?  

At WAHVE, we agree in the power and performance of experienced workers. It is clear that the attitudes of insurance firms toward older workers need to be reset. For our part, WAHVE is helping reimagine both staffing and retirement in the insurance industry and bridges the gap between insurance firms’ staffing needs and seasoned professionals’ “work-life” balance preferences as they phase into retirement.

Looming Caregiver Crisis in the U.S.

AARP’s Project Catalyst recently released a study in collaboration with HITLAB, the healthcare innovation and technology lab based in New York, that shows a very high family caregiver interest in using new technologies to help care for loved ones (71%), but the actual usage today of technology by caregivers is very low (7%) due to the lack of awareness of viable options and the time challenges involved.

According to Laura Pugliese, deputy director of HITLAB and member of the research team, the study is “a call to action regarding the tremendous challenges facing our society and unpaid family caregivers, who are unsung heroes. We are helping to put together a road map for innovative companies to produce technology products and services in the caregiver marketplace to address unmet needs. We want to find out what works and what doesn’t.”

That is the basic goal of AARP and its partners in Project Catalyst, including the medical researchers at HITLAB. The staggering statistic in this study is that by the year 2020 there will be 117 million Americans (including the aging baby boomers) who will need assistance with daily living and healthcare issues. The problem is that, although 117 million people will be in need of a wide range of assistance, it is projected that only 45 million family members will be available to help care for their loved ones. These family members are not only unpaid, but lose $522 billion in income, according to the study (“Caregivers and Technology: What They Want and Need”).

As a former caregiver for both my mother and father, who served in WWII and who were part of America’s greatest generation, I can’t even begin to share how stressful, time-consuming and emotionally draining the process is and the profound impact it played in both my personal and professional life.

As a caregiver over the span of several years, I became involved in finances, banking, wills, estates, taxes, power of attorney, selling a home, healthcare directives, Social Security, Medicare, Medicaid, senior housing, assisted living, nursing homes, DNR orders (Do Not Resuscitate), doctor appointments, surgery, emergency room visits, hospital stays and end-of-life decisions, in addition to just being a son and a brother. I wouldn’t have it any other way, of course.

The only technology available to me was my cellphone and answering machine, but AARP Project Catalyst has identified nine frontiers for innovative technology companies to address:

  • Medication Management
  • Vital Signs Monitoring
  • Diet and Nutrition
  • Aging With Vitality
  • Healthcare Navigation
  • Social Engagement
  • Physical Fitness
  • Emergency Detection and Response
  • Behavioral and Emotional Health

These nine frontiers certainly identify the key areas of concern of a caregiver. However, as I thought about all the time and effort involved from my own personal experience, what is lacking is overall caregiver support. I was often asked, How is your mom? How is your dad? Nobody ever asked how I was doing.

Nothing can prepare you for this caregiver role. In the middle of intense professional obligations as a vice president with responsibilities to major clients, I had to sell a house, find good doctors, get power of attorney, prepare financial statements, pay bills and find cleaning services while seeing that my parents were getting the best healthcare available at the right time and place and taking all the right medications.

Being a caregiver is at minimum like having a part-time job, unpaid. The AARP/HITLAB study found that on average a caregiver spends 20 hours a week on a wide variety of tasks. From my experience, that is about right on a good week.

I can envision existing and future technologies having the ability to better monitor medication regiments. My father, who suffered from congestive heart failure, a blocked carotid artery, diabetes, arthritis, sleep apnea and other ailments, was given so many medications that I had to work with the hospital pharmacy department to develop a check list of what medications he should be or not be taking, what for, why and how often. I developed a handmade chart on his refrigerator door and put numbers on his prescription drug bottles. My handwritten instructions were take # 1, 2, 6, 8, 10 and 12 in the morning, another set in the afternoon and another set at night. It worked, but I had to do this myself by hand with help of a pharmacist.

Initially, the doctors wanted to amputate my father’s legs due to poor circulation from congestive heart failure, but by getting a second opinion we learned that his cardiologist was prescribing the wrong medications. I got him a new cardiologist and the right medications. A dad whose sons didn’t have our healthcare background and connections would have needlessly lost his legs and his quality of life.

Although there are technologies in use today, the actual usage based on this real world study is only 7%. The ability to monitor vital signs, especially for people with sleep apnea, congestive heart failure and other chronic conditions along with glucose levels for a diabetic can bring both peace of mind to a caregiver and potential lifesaving capabilities for the patient.

This study should be a call to action, and I’m sure there are many potential technologies in the pipeline or on the drawing board. I am also glad that people like AARP and HITLAB and the sponsors of Project Catalyst, including Pfizer, UnitedHealthcare, Medstar Health and the Robert Wood Johnson Foundation, are working on this road map.

Project Catalyst is actually reaching out to caregivers themselves to determine what their needs are and what works and what doesn’t. HITLAB medical researchers literally went to people’s homes to interview them to determine their daily needs and their use of technologies as a caregiver. I believe a very comprehensive list of potential technologies should be developed and tested. I see that healthcare technologies and apps are being developed and tested now to address health monitoring such as vital signs and glucose levels. My fear is that this potential use of technologies will be fragmented and require multiple companies, each addressing one of the nine identified frontiers, and may be cumbersome or expensive.

A major issue will also be the ability of medical providers to monitor these vital health signs and other health issues in real time. In addition, will the health insurance industry, including Medicare and Medicaid, be in position to pay primary healthcare providers for this monitoring?

I would also like to see innovative companies provide a comprehensive list of capabilities to help with all the non-direct healthcare needs of a caregiver, such as selling a home, power of attorney, healthcare directives and finding professional caregivers such as visiting nurses, assisted living and nursing homes.

Stan Kachnowski, chairman at HITLAB, stated; “Our goal is to help bring the best technologies to the caregiver marketplace in order to make a positive impact where the patient (and their caregiver) comes first and profits last.”

AARP and HITLAB plan to continue their research and will conduct a series of pilot programs to test new technologies.

This is something that will eventually affect almost everyone either as a patient, caregiver or both. When doctors say there is no known cure for congestive heart failure, diabetes or Alzheimer’s or other chronic conditions, they mean it.

aggregators

The New Age of Insurance Aggregators

Tech innovation is coming to insurance, but where and when it strikes is uneven.  Auto and health insurance have been facing serious disruption, for instance, but for very different reasons (self-driving cars and telematics, vs. the ACA and hospital mega-mergers). Life insurance and commercial P&C are only now feeling disruption. Reinsurance and annuities are following behind.

To see trends, then, it can be instructive to focus on specific insurance functions rather than the type (market vertical).

Distribution — that is, sales and marketing — is one area that has been especially active compared with other functions such as underwriting, risk, investments, admins/support or claims.

Why disrupt distribution?

It’s where the money is. In general, when a P&C or life insurer gets $1 in premium, 40 cents goes to distribution (marketing/sales costs, i.e. the agent) and 50 cents goes to everything else (underwriting, claims, service/support, risk, fraud, product, executives, etc.). Only 10 cents is profit. The largest distribution cost is usually agent commissions, which range from 50% to 130% of a policy’s first year premium.

It’s easy for carriers to work with alternative distribution channels. Insurance carriers are used to third-party distribution. They have been using independent agents, wholesale agents and affiliates (e.g., sales through AARP) for years. Systems are already in place to easily take on new distribution outlets.
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The rise of insurance aggregators

Aggregators are simply comparison shopping sites — like kayak.com for insurance. They allow consumers to easily compare product features, carriers, coverage and price. They aren’t the only distribution disruptors, but new developments are making them more potent.

Comparison sites come in three general flavors: lead generatorscall-center-based agencies and digital agencies. From their websites, it can be difficult to tell them apart, but they operate differently and appeal to different investors.

Lead generators — such as InsWebNetQuote and Insurance.com — use a comparison shopping format to entice insurance shoppers to provide personal information. They then sell these leads, often to traditional brick-and-mortar insurance agencies. Lead generators specialize in either gathering lots of leads cheaply, or curating data to sell fewer but higher-value customer referrals. Lead generation is a specialized technique, an art even. But it’s mostly unrelated to emerging technology. It is difficult for non-lead-gen experts to assess the quality and sustainability of lead-gen platforms.

Call-center agencies can develop leads or purchase them; in any case, their call centers employ licensed insurance agents who make sales. A classic example: SelectQuote, founded in 1985 and known for its early TV ads, is now the largest direct channel for life insurance. Goji is doing this well in the auto insurance space and now has several hundred licensed call center insurance agents. Call-center agencies are also great businesses. Their core competency, however, isn’t technology. It is HR hiring and training. Hiring and training a large sales force and managing its churn is growth-limiting. A commissioned call center sales force might reach 300 agents, but it is almost impossible to get to 1,000 or more high-quality agents. Crucially, too, the model does not leverage technology, so margins depend on commissions remaining high.

Digital agencies allow customers to shop and buy entirely (or nearly so) online. Without a human sales force, they must create well-thought-out user experiences that make the process of buying insurance transparent and understandable. Typically, this requires building sophisticated interfaces into multiple carriers’ systems so that the customer experience is unrelated to the company selected. In general, digital agencies hire developer talent rather than sales talent. Esurance, one of the first successes in the space, was bought by AllState for $1 billion in 2011. A more recent example (and AXA Strategic Ventures portfolio company) is PolicyGenius, which is bringing this digital model to life and disability insurance.

I believe digital agencies are the future. They focus on technology to sell policies without the aid of a commissioned human agent. This is a crucial distinction because, while both call-center agencies and digital agencies generate income from commissions, call-center agencies have to split that commission with their licensed call center agent while digital agencies do not. This means that, at scale, digital agencies should have higher profit margins. In fact, it is likely that digital agencies will actually look to lower commissions to drive sales and to provide more competitive pricing than human agents or call-center agencies.

Insurance Aggregators 3.3.16.png

Insights from the U.K.

The U.K. insurance markets adopted the aggregator model earlier than U.S. carriers, which gives us a window into their potential future. What’s happened there shows us three things.

First, aggregators have captured a material share of the insurance market and are continuing to grow. A recent Accenture survey found that, in the U.K., “aggregators account for 60% to 70% of new business premiums in the private automobile insurance market” and that French aggregators have seen “18% average annual growth for the past five years.“ We’re already starting to see this in the U.S.: Oliver Wyman recently reported that “the number of insurance policies sold online has grown more than 400% over the last eight years.” Swiss Re said, “More than half of consumers say they are likely to use comparison websites to help make purchase decisions about insurance in the future.”

Second, aggregators eventually will compete with one another across all personal lines of insurance. U.S. digital agencies today focus on one type of insurance (life or auto or home), though they might claim to offer a few others. But almost all U.K. aggregators compete across all personal line insurance products.

Third, insurance carriers will get into the aggregator game. Two of the top three U.K. aggregators sold to U.K. carriers; GoCompare was purchased by esure, and Confused.com was purchased by the Admiral Group. Only MoneySuperMarket remains independent. And carriers are looking to create aggregators from scratch. Accenture’s report noted that 83% of U.K. carriers are “considering setting up their own aggregator sites.”

Start-ups, tech giants and carriers in the ring

Still, it’s not totally clear how digital distribution will play out here. Multiple start-up digital agencies have raised significant capital. PolicyGenius and Coverhound have raised more than $70 million, $50 million of it just in the last six months. This represents a fraction of what a major tech player (say Google or Amazon) could put toward an effort to enter this market. Interestingly, Google purchased the U.K. aggregator BeatThatQuote in 2011 and launched the California auto insurance aggregator Google Compare less than a year ago, but just announced it was shutting it down. That could be because Google Compare functioned as lead-gen for CoverHound and Google decided the fee it received per lead was cannibalizing its ~$50 per click ad-sense revenue from auto insurance search terms.

Long-term success in insurance requires focus, deep knowledge of the industry and deep knowledge of the consumer. Insurance is very different from most e-commerce products, and Google’s experience could be indicative of the difficulty big digital brands will have trying to crack the insurance aggregator market.

Finally, most large American carriers haven’t decided what to do. Purchasing an aggregator creates strange incentives, potentially driving customers to a competitor. At the same time, it also gives the insurer the opportunity to quietly select the risk it wants to keep and pass off the risk it’d prefer to give up. Progressive has had mixed success.

Final thoughts

I think the U.S. will see trends and dynamics similar to the U.K.’s, and soon. Within three years, the major digital agencies will start to compete fiercely, and, within five, one or more will have been purchased by a carrier.

More digital agencies also will tackle the complex insurance products: annuities, permanent life insurance and commercial insurance. Right now, start-ups are trying — Abaris for annuities and  Insureon and CoverWallet for commercial insurance — but their offerings aren’t yet as developed as Policy Genius or CoverHound.

Finally, I think the rise of digital financial advice platforms (a.k.a, robo-advisers or “robos”) give digital insurance agencies an interesting channel to consumers that will help at least one of them mature and grow to an IPO.

I asked two digital agency CEOs what they thought the future was going to bring. Here is what they said:

Jennifer Fitzgerald, PolicyGenius’ CEO, said, “Consumers are much more self-directed in the digital age, so the focus is giving potential insurance clients the tools they need — instant and accurate quotes, transparent product recommendations, educational resources — so they can go through the process at their own pace. Then it’s important be there for them with an intuitive, easy-to-use platform and service when they’re ready to buy. That’s the basis for the new wave of insurance education tools like the PolicyGenius Insurance Calculator, and is reshaping how consumers look at insurance.”

Matt Carey from Abaris said, “I think we’ll soon see a new wave of made-for-online products. Carriers have always gone to great lengths to create products that made sense for a specific channel.  The Internet will be no different. In our business, that probably means very simple lifetime income products that are subscription-based and have low minimums. Until then, I don’t think we’ll reach a tipping point in the migration from offline to online.”

Social Security Numbers Are Dead

I am a senior citizen. While this distinction entitles me to a variety of perks like discounted movies and bus fare – as well as the occasional free doughnut (seriously) — it’s also a ticket to the identity theft lottery.

Turning 50 gets you an invitation to AARP, and turning 65 gets you a Medicare card. What’s this have to do with identity theft? Take a close look at a Medicare card. The identification number? It’s a combination of the cardholder’s Social Security number and one or two letters.

Health insurers no longer include Social Security numbers on the cards they issue to people. The concern was that using SSNs needlessly increased the risk of identity theft, which was, and continues to be, rising exponentially. When health insurers made the change, they stopped being co-conspirators in what has become a national epidemic.

According an article by reporter Robert Pear in the New York Times, private insurers under contract with Medicare are not permitted to use SSNs on insurance cards when providing medical or prescription drug benefits. But in a serious case of “Do as I say, not as I do,” Medicare has used Social Security numbers on more than 50 million benefit cards, heedless of the warnings of privacy advocates, consumer protection officials, federal auditors and investigators working on identity theft cases.

Section 501 of the Medicare Access and CHIP Reauthorization Act of 2015, a bipartisan provision written by Rep. Sam Johnson (R-TX) and Rep. Lloyd Doggett (D-TX), signed into law recently by President Obama, finally mandates the removal of Social Security numbers from our Medicare cards. (Well, let’s just say it begins the process — and, like all processes in Washington, let’s hope it actually gets done before my toddler is eligible for Medicare.) The new law is clear: Social Security numbers must not be “displayed, coded or embedded on the Medicare card.”

More than 4,500 of my fellow seniors enroll in Medicare every day. It is estimated that over the next 10 years, some 18 million more of us are projected to qualify, which will bring the total Medicare enrollment to 74 million by 2025.

What Lit the Fire?

After years of begging, cajoling and warning to no avail, what finally forced both parties in Washington to get off their butts and get it right?

Pear speculates that is wasn’t one thing but a set of circumstances starting with the nearly universal digitization of medical records and, of course, ending with a culture plagued by highly effective hackers. Consider that in just the first quarter of 2015 more than 91 million Social Security numbers were exposed to unauthorized persons in just two data compromises: Anthem and Premera.

What the new system will look like is still anyone’s guess. Here’s what we know, according to the New York Times article: SSNs will be replaced by a “randomly generated Medicare beneficiary identifier.” Additionally, Medicare officials have eight years to get the new system completely up and running—four years to issue cards to new beneficiaries and four more years to reissue cards to existing beneficiaries. It was unclear whether those two four-year items were to happen simultaneously, but since we’re talking about a government timeline there is an argument for erring on the side of forever.

Like all major government initiatives, this will be no small feat. But it is a critical one if we are to stop hearing the pitter-patter of scammer feet tap dancing on the finances of senior citizens.

Why did it take so long? Why does the IRS still require SSNs? Because we’re talking about the government.

The record speaks for itself:

  • 2004 – The Government Accountability Office warns we must reduce our dependence on Social Security numbers as individual identifiers.
  • 2007 – The White House Office of Management and Budget directs federal agencies to “eliminate the unnecessary collection and use of Social Security numbers” within two years.
  • 2008 – The inspector general of Social Security calls for the immediate removal of Social Security numbers from Medicare cards. The departments of Defense and Veterans Affairs launch major initiatives to delete Social Security numbers from their identification cards.

How about the Department of Health and Human Services, which supervises the Medicare program? Well, let’s just say that according to the Times, the GAO felt that HHS was moving—shall we say—glacially and that it really was all about money. (Forget the fact that identity theft costs America and Americans billions annually.)

The Medicare agency is no small operation. It pays close to 1 billion claims from 1.5 million healthcare providers every year. While I understand that the HHS has considerable budgetary and logistical issues when dealing with the identification quagmire, it is nothing compared with the expense and uproar caused by identity theft in the lives of the people HHS serves. That’s a long way of saying that this identification card “modification” is long overdue.

In the meantime, what can you do if you’re concerned that your Social Security number is in the wrong hands? Because the number can be used to perpetrate many types of crimes, not just credit-related, the problem can be difficult to track. But it’s still important to check your credit reports regularly for signs of fraud — like new accounts you didn’t authorize. You can get your free annual credit reports from AnnualCreditReport.com, and you can get a free credit report summary, updated every month on Credit.com, to watch for changes.

That said, we are not living in a “So it is written, so it is done” age. Congress has to sit on the HHS to get 100% compliance with the law as it was passed. And we have to sit on Congress. And while we are sitting on our favorite 535 federal lawmakers, perhaps they can ask the IRS what’s taking it so long to make some changes — including killing the SSN as identifier — so Americans can stop being such sitting ducks in the sights of miscreants.