Healthcare and employee benefit costs have steadily increased for many years, making a strategic approach to health insurance more important than ever. Moreton & Company’s in-house underwriting department focuses on helping employers make data-driven decisions and facilitating positive relationships with carriers.
As director of underwriting, Brittany Mann provides a hands-on approach to underwriting, often working directly with clients and carriers to achieve the best results available. Brittany began her career as an accountant before discovering an aptitude for underwriting. She developed her skills and experience as a carrier underwriter before joining the Moreton team in 2019. We asked Brittany to give us an insider’s view of insurance underwriting.
What’s the difference between a carrier’s underwriting department and a broker’s?
Moreton’s underwriting department is more focused on consulting, whereas on a carrier’s side, you’re just figuring out what a rate should be, and that’s the end of it. On the broker side, you tell the employer what the rates are, but you also explain the why. We help the group strategize on benefits, rates, point solutions, and contributions.
How much of underwriting is interpreting the data versus simply crunching the numbers?
Around 70% is interpreting the data. Our underwriters are very involved in the creative solutions that Moreton has come up with over the years. We work hand in hand with the producer and account manager, and we are constantly vetting different programs and vendors and then frequently going out to meet with the groups to discuss the point solutions that will work best for them.
Does underwriting change with group size?
Underwriting only works on groups that we are able to receive experience on, which is typically groups with one hundred or more enrolled. With groups smaller than that, carriers won’t release that data due to PHI and HIPAA. Beyond that, I wouldn’t say that underwriting changes based on group size. It changes based on funding type. Fully insured groups have a lot less flexibility and control over what we can do; we’re at the discretion of the carrier. But if a group is self-funded, we can do a lot more. You have the flexibility to change plan designs and add more programs to help lower costs.
What trends are you noticing in terms of rising healthcare costs?
Pharmacy is out of control. There have also been a lot more claims over one million dollars since the ACA was implemented. Prior to the ACA, the maximum lifetime amount for any individual was one million dollars. They did away with that, so now claims over one million dollars are more frequent because now there is not a max.
Are there any common misconceptions that our clients seem to have about underwriting?
The misconceptions are usually about cost in general. A comment that I get a lot is, “Our medical premium’s increasing 10%, but we can’t increase wages 10% to help.” Our clients trust underwriting for the most part, but at the end of the day, they’re looking out for their bottom line. Sometimes they think we have more flexibility than we really do.
Their goals and preferences definitely do impact underwriting. For example, if I’m looking at trying to change their pharmacy benefit, I can make adjustments and tweaks with that specific group’s situation in mind.
We are an advocate for the employer. We will go to bat for them with the carrier. And all of the underwriters here at Moreton have all worked on the carrier side, so we all know how we wanted to be approached on the carrier side. We’re able to approach the carriers with facts versus emotion.
How often do you actually change the carrier’s mind on something?
Frequently. I would say every group. From working on the carrier’s side, we know that it’s like buying a car; the initial price is not really the price. There’s always a little bit of wiggle room in the rate. And I also know where they hide profit, so we’re able to negotiate. I wouldn’t say we’re able to change their mind to where we think the rate should be all the time, but we’re able to meet them in the middle.
What innovations or technologies are you most excited about in the underwriting space?
We have invested in multiple programs to better assist our clients. We use a data analytics program, Cedar Gate, to take a deep dive into the group’s claims from trends to ongoing high cost claimants. Moreton & Company has invested in Pharmacy Contract Software to analyze Pharmacy Benefit Managers (PBMs) and hold them accountable to performance metrics.
With this tool, we can evaluate the financial impact of different PBMs, analyze PBM complex contract language, monitor PBMs’ performance contractually and financially, hold PBMs accountable to contract guarantees, view performance reports to compare costs and utilization against benchmarks, and compare the pharmacy’s ingredient cost to the National Average Drug Acquisition Cost (NADAC) to determine a reasonable markup.
We have also invested in Turquoise, which is a company that’s transforming how to navigate the complex world of healthcare pricing. By using price transparency data, Turquoise allows you to understand exactly how carriers and plans compare by repricing claims. Turquoise is helping organizations make smarter decisions and driving meaningful change in how we approach carrier selection and cost management.
