Forecasts always contain good news and bad news. As we enter 2010, the good news for our industry is that there will always be a need for professional health and life insurance agents, and there might be fewer people competing for this business. The challenge will likely be a continued reduction in commission rates and fewer resources provided by the insurance companies. Also, the products and how they are sold will continue to evolve, but that can be both good and bad news.

As I write this, the national health-care reform package is still firming up, but whatever is eventually passed out of the 111th Congress will have a major and long-lasting impact on our industry and all Americans. The changes are not likely to take effect until 2013, so the impact in 2010 will be incremental. In the short term, we likely will see insurers, agencies, and others begin to position themselves to play by the new rules.

Health insurers will probably have to implement numerous major changes to ensure compliance with the new rules. For example, underwriters likely will no longer have the option to decline, rider, or rate-up people for individual medical coverage. This will force underwriting departments to transition into enrollment departments, similar to what happened in the small group market over the past 15 years. Actuaries will have to try to set rates based on assessed risk without the ability to exclude any of it. If an individual mandate passes (and stands up to likely lawsuits challenging its constitutionality), requiring all Americans to obtain health insurance, commissions are sure to go down. Agents and agencies will need to write more business, more efficiently, to continue earning a good living in the health insurance market.