By Colleen Callahan
The California single-payer health care bill, Senate Bill 562, passed the state Senate and is now in the General Assembly. It is sad so many of the state senators simply followed the herd and voted mostly along party lines.
Since the vote, the highly-controversial bill has received a great deal of attention. Part of the attention focuses on the shortage of answers to questions asked about how the bill will be funded. There is no method of paying for it other than increasing payroll and sales taxes. The state Senate appears unconcerned about the loss of jobs expected across a variety of sectors, not only among insurance industry professionals. The California Association of Health Underwriters predicts nearly 500,000 jobs will be lost in California if SB 562 becomes law.
Interestingly, when I asked a number of health insurance agents and colleagues around California about the impact of this bill, their first concern was for their clients. All recognize they will be out of a job; many have employees and will be forced to lay them off. But their first concern is for their clients.
What will this mean to Californians?
Alexis Blagg-Devorss, an employee benefits specialist in Folsom, Calif., lamented the forced extinction of consumer choice. “There would be no consumer choice here,” she said. “Want to buy a different plan through private insurance? Well, you can’t.”
Rebecca Canova, a sales consultant for Warner Pacific, predicted “significant job loss statewide among agents and health insurance professionals who consult with consumers and small business on a daily basis.”
“Consumers will lose access to insurance agents who have years of experience,” she continued. “Agents spend a great deal of time researching the best options for their clients.”
Not to mention the untold number of hours agents spend in helping with claims, billing, and educating consumers on the ways to obtain benefits. Agents provide help with myriad challenges related to employee benefits across multiple product lines. What will happen to ancillary benefits such as life and long-term disability insurance?
With regard to Medicare eligible clients, Blagg-Devorss said, “All Medicare plan recipients will be forced to move to this [single-payer] plan. No choice for our seniors either.”
Canova noted that in northern California, managed care plans for those who are eligible for Medicare have limited provider choice. “For the past two decades, providers have pushed back on managed care plans and refuse to accept lower reimbursement,” she said.
What will happen to seniors who travel or live part of the year in one state and part of the year in another state? How will they obtain care? What payment process will be developed? Will other states agree to bill the state of California and wait for reimbursement?
One small group client/business owner told me that an increase in payroll tax will force him to shut his doors. His small business in Concord, Calif., that produces approximately $4 million in annual revenue will close. Five people will lose their jobs and he will have to revise his retirement planning.
Blagg-DeVorss echoed that sentiment. “I have talked with many of my business clients/owners who said they would either have to close their doors or move out of California,” she said.
“Single-payer does not solve the ills of our current health-care delivery system,” said Erika James of FullCircle Financial and Insurance Services in Burlingame, Calif. She pointed out that many of the cost drivers are related to preventable chronic conditions.
Lifestyle choice is one of the largest contributing factors to the cost of health care. James said. “Our true challenge is personal responsibility to improve our health choices,” she continued, adding that she believes the result would be lower costs for services.
The outlook is rather bleak. Higher taxes and higher unemployment so that we can get insurance for the mere 7 percent of Californians who have not enrolled in coverage?
James nailed it when she said the issue is about personal responsibility. People need to enroll in health coverage. Our state Senate wants to change an entire system, while risking incredible job loss, disruption, loss of choice and terrible confusion for our seniors.
Colleen Callahan, CLU, LUTCF, is owner and president of Colleen Callahan Insurance Services in Pleasant Hill, Calif., and is a member of the California Association of Health Underwriters. Colleen may be contacted at firstname.lastname@example.org.
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