| Copyright: | A.M. Best Company, Inc. | | Source: | BestWire Services | | Wordcount: | 617 |
A decade and a half ago, it was the now-defunct Health Insurers Association of America that led the charge against then-First Lady Hillary Clinton''s health care reform plan, marshalling the entire business community in a revolt that had at least a bit to do with the Republicans'' take-over of Congress in 1994.
But as the health insurance community prepares for revived efforts at health care reform under president-elect Obama, it is not the insurers who write the coverage, but the producers who sell it, that seem most alarmed by changes that could be coming.
America''s Health Insurance Plans greeted the Obama victory by declaring its members "support coverage for all Americans, coverage they can afford, and coverage they can keep," and the Blue Cross Blue Shield Association said Obama''s health care agenda has "in common many of the same stepping stones to health care reform" as the Blues'' own plan. But agents and brokers have been far less sanguine about what it could mean for them.
Though several aspects of Obama''s health plan concern them, the issue that has benefits brokers most concerned is the proposed "National Health Insurance Exchange," a federal pooling mechanism open to all businesses and all individuals. By making the federal government the primary intermediary in the benefits market, and greatly curtailing the degree to which group plans can differ in cost or design, the NHIE, some fear, could effectively displace the agent community nationwide.
"Pooling mechanisms are not new," notes Robelynn H. Abadie, president of the Association of Health Insurance Advisors, the health and employee benefits arm of the National Association of Insurance and Financial Advisors. Abadie notes that at least 10 purchasing pools have been tried in the past, with even the most successful – California''s PacAdvantage program -- no longer in business. The model has been revived in recent years in Massachusetts under the name "the connector."
"None have been successful in lowering costs," Abadie said. "However, repeated failures have not dissuaded lawmakers."
And it isn''t just life/health specialists who are paying attention. Agents and brokers that traditionally have been engaged primarily in commercial property/casualty increasingly have been relying on the profitable growth of health benefits as a hedge against the waning and waxing of the insurance pricing cycle.
"Employee benefits, for independent agents, is the fastest part of their book of business," said Robert Rusbuldt, president of the Independent Insurance Agents & Brokers of America. "For a medium-size agency, employee benefits is now constituting a meaningful size of their book of business, and it''s the most profitable part of their book of business, because there''s no soft market."
While many in the health insurance community were just as concerned about aspects of Sen. John McCain''s health plan – particularly its suggestion of capping the deductibility of employer-provided benefits – Joel Wood, senior vice president of government affairs with the Council of Insurance Agents and Brokers, noted there also had been an understanding that McCain would have been unlikely to ever get his plans through a Democratic-controlled Congress. Obama will have other problems with his plan, including finding the money to pay for it, but congressional support will not be one of them.
"To the extent that anybody''s going to pay for it, beyond those individuals making more than $250,000, who will pay for everything under the Obama plan, there has been this nebulous conversation about ''meaningful contributions'' from employers," Wood said. "We think that that could have the perverse effect of driving more people into the federal system, doing the Massachusetts-style thing, where you just pay your penalty up-front for not covering your own folks and then you wind up with a dysfunctional governmental system."
(By R.J. Lehmann, Washington bureau manager: raymond.lehmann@ambest.com)
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