Coming Soon: The Inevitable Revision of the Patient Protection and Affordable Care Act

Health care reform legislation may have been signed into law on March 23, 2010, but the issue is not going away. Anyone watching the election campaigns playing out across the country can attest to that. Republicans have made the  “repeal and replace” of health care reform a key promise in their "A Pledge to America" campaign document. While some Democratic candidates are touting their support of the Patient Protection and Affordable Care Act, others are bragging about their opposition to it. And others, like West Virginia Governor and Senate candidate Joe Manchin have talked about “repealing the things that are bad in the bill.”

Then there’s the impact on polling. Now, some readers of this blog get vehemently angry that Congress and President Barack Obama would dare pass legislation opposed by the public. I disagree. Political leaders have a job to lead, to make tough choices, to examine the facts, their constituents’ interests and then to cast their votes in accordance with their beliefs and conscience. I do not think politicians who flip-flop in whatever direction the polls show is popular at the moment are worth a lot. If politicians are simply to reflect the majority of opinion we could replace Congress with online survey software and be done with it. Also, consider this: if politicians only voted as the polls dictate there would have been no Civil Rights Act in 1964. American troops would have been out of Iraq during the Bush Administration. Whether liberal or conservative, there are numerous examples of legislation passing in spite of polls showing a majority of Americans opposing the new law that you are likely to applaud – and decry.

Nonetheless, polls do and should be a factor in the deliberations of politicians. They indicate when problems have reached a critical point where a solution is demanded. And they can serve to help shape and influence the likely outcome. Some polls of late have shown that a plurality of Americans – and perhaps more important given that election day is near at hand, likely voters – have an unfavorable opinion of the PPACA. But if polling is to influence decision making, then it’s important to dive a bit deeper into the numbers.

A recent Associated Press-GfK poll shows why. This survey shows that only 15 percent of likely voters support leaving the new health care reform law as is while 85 percent want the PPACA changed in some manner. However, that 85 percent is far from monolithic. 37 percent of likely voters surveyed said they wanted to repeal the Patient Protection and Affordable Care Act completely. Another 10 percent wanted changes to the law that would narrow its scope, but did not call for repeal. And 36 percent, a nearly identical number to those supporting repeal, want the law expanded. I couldn’t find a copy of the poll itself, but I assume this latter group includes those who support a single payer system or at least a public option, who want greater regulation on insurance carriers and/or who want greater cost controls included in the legislation. However, one could easily assume a single payer advocate, for example, might simply state they want the new law repealed.

My point here is that advocates on the right and the left will be seeking changes to the PPACA. The basic law may have passed in 2010, but it will evolve over the next few years. Some of the likely battles:

  • Repealing the requirement that businesses issue 1099s to any corporation or individual to which they pay $600 in a year. Democrats and Republicans alike support changing this provision. Whether it’s repealed or greatly revised is the only open question. Similarly, requirements for including health insurance premiums paid on behalf of employees on W-2s (which is optional in 2011) create a burden on businesses, especially small ones, that will necessitate changes.
  • There will be an effort to revive the idea of creating public run health plans (the so-called “public option”). Given the firestorm of opposition to the federal government expanding its role in America’s health care system, however, I don’t see the votes being there for this approach – especially in a Congress with small majorities in each House.
  • I expect, although it may be more of a hope, that there will be a push to allow premium subsidies to Americans earning less than 400 percent of the Federal Poverty Level to use those subsidies outside the exchanges being set up under the PPACA. This would allow those receiving the premium support greater choice and force the exchanges to compete with the outside market on a more level playing field. The exchanges are unlikely to go away: both Democrats and Republicans support them. But taking away arbitrary advantages will result in greater and more fair competition in the marketplace. Let the best offerings win.
  • There will be proposals to do away with the mandate that all Americans obtain health care coverage. While there are law suits seeking this result, I personally don’t think they’ll prevail. But Republicans (and some Democrats) will see a benefit to championing the repeal of an individual mandate. Neither party, however, is likely to seek a repeal of the requirement that carriers accept all applicants, regardless of their health conditions. As I’ve written before, a mandate on carriers to sell health insurance absent a mandate on individuals to buy imposes a horrific surcharge on health insurance premiums. I would hope this effort fails, but fortunately, if it succeeds, there are other ways to reduce the inevitable adverse selection that would follow (impose limited open enrollment periods, increase premiums or impose pre-existing conditions when consumers buy coverage after going uninsured for a specified period of time, etc.)
  • And maybe Congress and the Administration will focus attention on the biggest driver of increasing medical insurance premiums – the skyrocketing cost of medical care. The PPACA has some meaningful cost containment ideas hidden away in its 300,000+ words, more than the new health care reform is given credit for  (the topic of a future post). But even so, there’s a lot more to do. Lawmakers know they need to confront this issue eventually. Eventually they will.

We all have a tendency to draw straight lines from current data. That’s how bubbles happen. Stocks are going up and they’ll continue to do so. Gold is at a record high it’ll continue going higher. Tulip prices are skyrocketing and they’ll do so forever.

The same phenomenon occurs in connection to laws and regulations. A law passes and humans have a tendency to accept that that’s that. Now that the law is in cement nothing will change. But laws evolve. They are molded by regulators. They are shaped by the people who live under them. And sooner or later they are revised by the legislative body that passed the new law in the first place.

When thinking about the Patient Protection and Affordable Care Act, intense revision was, and is, inevitable. No law seeking to reshape America’s health care system would get it right on the first try. Politicians may proclaim “Mission Accomplished” when speaking of legislation (and wars), but the reality is the goal is never achieved perfectly and refinement is always needed Usually there’s a passage of some time before the first attempt to address a problem and subsequent efforts. Changes to the Patient Protection and Affordable Care Act are likely to start much sooner. I’m thinking early January 2011.

23 thoughts on “Coming Soon: The Inevitable Revision of the Patient Protection and Affordable Care Act

  1. Alan, I wanted to ask you a question about a paragraph you wrote in your prior post entitled, “Why Brokers Will Survive Health Care Reform’s MLR provisions”. You had stated, “…I was going to note that many carriers offering small group and individual coverage were already fairly close to meeting the PPACA’s medical loss ratio requirement. And finally I was going to highlight the expenses currently treated as “administrative” by carriers that will now be either excluded from the calculations (e.e., many taxes) or that will now be reclassified to the “claims” side of the calculation (e.g., quality improvement and disease management programs).”

    Alan, can you please elaborate, and tell me about the taxes that were removed from the MLR calculations, and other expenses now reclassified as claims instead of administration. I suppose that releases stress on the 80% rule, and certainly would encourage us as brokers that there’s a little more breathing room for us.

    Also, thank-you for repeating my words in your post. It was such a surprise, and was more pleasing than chocolate.

    Ann H.

    • Your words were elequent and it was a pleasure to elevate them to a post.

      As far as the MLR definitions, I’ll probably go into this in more detail in a future post, but the short of it is: in most states most carriers considered expenses related to health quality efforts (e.g., nurse concierge services, disease management programs), including the IT and other support attributed to them, as “administrative” expenses. Medical expenses used to calculate their medical loss ratios were defined as solely claims. The PPACA redefined medical loss ratio to include health quality improvement efforts. As a result, costs related to these services and programs will now be included in the “claims” side of the MLR calculation. Similarly, as far as I know, taxes paid by carriers were generally included in the “non-claim” side of the MLR calculation before the new health care reform was enacted. But the PPACA allows carriers to exclude certain taxes from the calculation altogether (they’re simply not considered in either the numerator or denominator). There is some controversey over what taxes are exlcuded and which would remain on the administrative side of the formula. The rules proposed by the NAIC basically calls for all federal taxes other than those related taxes on investment income and the like to be excluded. Taken together, the NAIC’s determination does provide additional breathing room in the MLR calculations. They’ll still have an effect, but for carriers that were already close to the 80% medical loss ratio target, they’ll now be even closer.

  2. Well thought out comment, Spencer. I might add that another thing to be amended is the provision that allows tax subsidies for those under 400% of the poverty level ONLY IF THEY PURCHASE THROUGH THE EXCHANGE. This creates unfair advantage for the government, and it limits competition and innovation. Yes, I understand that poor people don’t owe taxes and can’t just get a refund on their taxes at the end of the year. But there are other options than using an exchange to direct those funds. Currently here in AZ we have a small business tax credit where the state of AZ simply certifies eligibility for the credit, then the state of AZ provides funds to the insurance company directly, which shows up as a credit against the insured’s premium. There’s no reason to tie up the subsidies through the Exchange, and it causes unfair government competition and control.

  3. “The latest Rasmussen Reports national telephone survey shows that 53% of Likely U.S. voters favor repeal of the health care law, including 43% who Strongly Favor repeal. Forty-two percent (42%) oppose repeal of the bill, with 32% who are Strongly Opposed. (To see survey question wording, click here.)” http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/health_care_law

    This was just released by Rasmussen, a major polling company used by CNN, FOX, and many other organizations and media with political philosophies in between.

    I can think of few “actions” that could be more disruptive to the American Public, or which would cost the taxpayers immense amounts of money to implement, than repeal of the unpopular HCR bill, known as the PPACA. It will be far less disruptive and far less expensive, in my opinion, to simply “amend” those sections of the law that the public find distasteful.

    Certain sections, which some find distasteful, should be kept and reinforced, such as the “Individual Mandate”. While Americans stand on their “Constitutional Right” to their own self-determination, I.e. being responsible and carrying health insurance, a massive number, many millions of Americans, simply won’t do so, the excuses myriad in number and only one valid, “I can’t afford it” and that can be proved with tax returns. Alan, in response to the question “Will the penalty for not carrying coverage be raised in order to make it more meaningful?” answered in the negative, based on common-sense political considerations. We can only hope that when all is said and done, Congress will find the courage to do so anyway…this country has been on an “Entitlement Deserved” and “Societal Welfare-ism” bent for far too many decades, and “Individual Responsibility” must finally be encouraged. Since the public refuses to be “Individually Responsible” it must, until it becomes ingrained in our society, be mandated.

    Other sections of the law are good; Insurance Reforms, I.e. Guaranteed issue (need that “You gotta carry it” mandate), no rescission’s, Legal proof of Residency (Citizenship or Green Cards), employer punishments for hiring Illegals (is that a part of it? It should be), reasonable MLR that PREVENT anyone not licensed as an Agent/Broker to “Navigate” (Oh, please, enough with the euphemisms, already! It’s like saying “Undocumented Workers” to define all Illegals when many are not here to work, but to leach off of our entitlement programs), yada, yada. Many of the “Insurance Reforms are good reforms. Some that are included are not, others should be added. All Public, I.e. Government options, should be discarded. The fact that the ultimate requirements will be Federally mandated, is enough Government involvement.

    Repealing of the PPACA, IMO, would lead to incredible feelings of desperation, a feeling of being “set adrift in the sea” with no oars, no engine, no compass, and no idea whatever of what lies beyond the next huge wave. That is a bad idea.

    Let’s amend, remove what is bad, and improve what is good about this law. We must end this practice of going from one extreme to the other. Doing otherwise would be like asking our insurance consuming public, and the Agent/Broker Community to fall off another cliff with no idea of the “impact” they will make when they hit ground.

  4. Just received this email from my payflex account:

    Over-the-counter (OTC) Information Update
    October 2010
    Dear PayFlex participant:
    Starting January 1, 2011, certain categories of over-the-counter (OTC) drugs and medicines will require a prescription in order to get reimbursed through an FSA, HRA, or HSA plan. The change is due to legislation passed within the Health Care Reform. To help you understand how this provision will impact you, please read the enclosed communication.

    OTC Update – October 2010

    Sincerely,
    PayFlex Systems USA, Inc.

    DO NOT REPLY TO THIS EMAIL. This was sent by an automated system. “Reply” messages are automatically deleted and will not receive a response.

    HEALTH CARE REFORM IS ALREADY COSTING US!

    • Frank,

      Health care reform is costing us as well. I’ve been a broker in the DC area since 1986. Last week we received a communicaton from CareFirst (local Blue Cross Blue Shield plan) indicating that they would be reducing commissions on large and small group business effective January 1. They say it’s in response to the MLR requirements etc. On our large group accounts they are literally confiscating the commissions that are clients pay for our services. None of our clients think that health care costs are higher because of our commissions or even our existance for that matter. In fact quite the contrary.

      This cut means that in the short term my brokerage business has been turned upside down. Expenses and overhead will be higher than our revenue. The reality of this still has not sunk in. Our clients have always valued our services and for the last 24 years none of them have ever complained about our compensation. The power of the federal government is far reaching. What this action will mean for many of us in the DC market is that good hard working people will see reductions to their salaries and even job losses. All in the name of what?

  5. Brilliant article, Alan. Your description of the role of our elected representatives and leadership is something voters should heed. Then perhaps, they’d become more informed before supporting candidates based on a compelling sound byte.

    Re. The mandate: I think we all agree that more people would buy health insurance if the penalty for non-compliance was higher than the level in the bill. Do you expect that amount to be increased or not?

    • Will the penalty for not obtaining health care coverage be increase? That’s a good — and important — question Robert. I believe there are those in Congress who recognize the problem. The challenge is that Republicans (who once supported the idea) have made opposition to the individual mandate a centerpiece of their anti-PPACA rhetoric. Given that nothing will pass going forward without bi-partisan support (neither party will have the majority needed to get anything through the Senate. And whichever party — most likely the Republicans — have a majority in the House it will be a small one). Which means unless the Republicans in Congress have the stomach to go against all those GOP Attorneys General suing the federal government over the individual mandate it’s unlikely they’d support making the penalty greater. Do many of these lawmakers recognize this is bad public policy? Yes. Will that change their votes? Nope. Politics trumping good public policy is a tendency shared by politicians of all parties.

  6. Alan, I continue to re-visit the core problem of PPACA. With the national debt of 14 trillion gaining on the gross domestic product of 15 trillion, the annual deficit at almost 1.4 trillion, and total unfunded liabilities now 111 trillion, where are we going to get money for premium subsidies and the inevitable attendant government expenses?

    • Rick,

      You asked your question of Alan; I too, am looking forward to Alan’s response.

      My take is, the administrations that propose this stuff, and the Congresses that carry through such legislation, never think beyond a few years and their own “Successes”. Yes, in warning to my “Friends on Board”, this will be a pragmatic post, based on years of experiencing this stuff.

      Regarding ObamaCare: Remember Rick, that in order to, in a manner financially acceptable to the Blue Dog Democrats, pass the legislation, it was necessary for the Administration and Congress to have the CBO (Congressional Budget Office) show a revenue neutral or less, cost, to be achieved by 2020. The data submitted to the CBO was intentionally low-balled, in order to have the CBO come out with the numbers needed to assure passage. According to the CBO, after passage, they o0nly returned results based on the data given. “Garbage in, garbage out.” HHS, and CMS, both issued statements that they found it highly unlikely that any sitting Congress would approve of the phased in take of $500Billion from Medicare, as the country is aging, the “Senior Vote” will become more and more important, and, paraphrasing, who would be foolish enough to agree to the destruction of Medicare Benefits knowing that they would never serve another term in office. That isn’t a question. Medicare is already suffering, as many physicians, already paid far below “retail” (The Medicare formula for reimbursements to physicians has always been based on the costs of health care delivery two years before…data collected for 2007 at the beginning of 2008, new rates of reimbursement implemented in 2009, simplifying), have been subjected to a 22% slash in payments, this year, per ObamaCare. I’ve asked my three docs (one in Palm Springs, two in Seattle) if they will continue working with Medicare, and the answers have been, “For now.” Also, as I now have experienced first hand, the Rx benefits under Part D have been restricted and are now being paid under a more complex formula than before HCR.

      Also regarding ObamaCare, the costs for small businesses have gone up dramatically, as the new IRS reporting rules are ludicrous in the detail required, costing small business extraordinary sums of what we would consider to be “Overhead”. There have been discussions about repealing some of these onerous requirements, but with what will they be replaced? The income to ObamaCare from these new requirements is estimated to be around $17Billion. Add to that the $500Billion that is supposed to be taken from Medicare (though a goodly portion still may be) and we’re already several hundred billion dollars short of the anticipated costs, add in the $17Billion from small business and wham! We just far exceeded what we were told HCR would cost the taxpayers. Add to that (as yet unknown) figure those other expenses that we don’t really yet know are going to it, and where are we? Back to 1965 and the passage into law of Medicare.

      Medicare was signed into law in 1965, took effect in 1966, and I started marketing the then brand new product called Medicare Supplements, long before Plans A through I were mandated and long before the “Medicare Catastrophic Act of 1988” took effect in 1989. That act was supposed to be the “Cure all” for Medicare funding. Clearly, it failed.

      Medicare is virtually broke. Regardless of whatever you hear the politicos say, cuts in Medicare benefits are being considered by Obama’s own “Debt Commission” being chaired by Alan Simpson (R) and Erskine Bowles (D). The picture that they painted for the members attending the Nat’l Gov Ass meeting in Boston, to quote the Huffington Post, was bleak. Link to source (Nat’l Gov. Ass. meeting) provided in following paragraph.

      Social Security is in very serious trouble; its funds have been severely depleted by monies taken to keep Medicare afloat. Among recommendations being considered by the “Debt Commission” is raising the age of retirement for Social Security purposes to age 70. These comments and others were related to the National Governors’ Association at a meeting in Boston, on July 11, 2010. Huffington Post: http://www.huffingtonpost.com/2010/07/11/debt-commission-leaders-p_n_642406.html.

      Medicaid is in very serious trouble (It’s broke).

      None of what I have just reported means that we have no future. It does mean that all of us are going to be hit, and hard, in “belt tightening” cuts, in order to save America from financial ruin. I am now more convinced than ever before that a number of the deficit raising components of ObamaCare will, of financial necessity, not take place, and we will see a great number of amendments curtailing promises made that clearly cannot be delivered.

      Years ago, around 1969, I had lunch with my dad, a cardiologist, and some of his colleagues. The subject of Medicare came up. They were all opposed to it. “Sure you are”, I said, “You make less money under Medicare, right?”. “On the contrary”, they said, “we make more. Because now the government pays us for all of our clients.” Just weeks earlier, I watched as dad handed $4K worth of overdue bills back to his Office Administrator, Florence, and told her to write them off. He charged those who could afford to pay what he felt right, and didn’t charge others anything. They told me then, and their words come back to haunt me, that we, my generation, would end up paying for all of it. How right they were.

      Not a single Government Entitlement has ever worked in America, and they won’t.

      Ann H wrote a very articulate, and eloquent, commentary on how to view the “world turned upside down” as a time that has also presented many new opportunities. She is correct in what she says. I’d like to add to that the necessity of all of us learning to do with less, learning to live, as a country, within our means, and to pay off our debt (to China and Arabic countries especially, who own a great deal of that debt), and work to bring some common-sense to government, ours, which has shown a serious lack in credibility in its continuing to “mortgage” our futures.

        • LOL

          Curt, I’m not laughing at you…your comment made laugh.

          I followed your link. While the MSNBC article is reporting a serious issue regarding Employer and Employee premium costs, I am convinced that if Employees (more so than Employers) feel a pinch in their pocketbooks because of HCR they’ll let Congress know quickly, and loudly. We have, as Alan and Ann have both pointed out, been through tough times before and “weathered it”. And they are both correct when they point out that opportunities also exist that can open other doors within our own profession.

          As an example, a little known (seemingly) “adjunct” to ObamaCare is the passage of “The Class Act”, which is the Government’s attempt to market Long Term Care insurance. In reality, it is so poorly written and even requires the policyholder to wait for five years before they are eligible for benefits all the while paying in their premiums, that I’m convinced that the opportunities for those who specialize in LTCi, or begin marketing LTCi, are better than ever. Why? When I was still in business the government did an abominable job of educating the public on their need to purchase this important coverage. Only the Agent Community, the companies, and some insurance departments educated the public about the need to consider coverage to protect their futures. Now, thanks to the Class Act, the Government will finally be educating the consumer as well as to the need to purchase such coverage, and as the Government coverage really is lousy (that five year period is not allowed, by law, to exist in Private LTCi), any agent speaking with Individuals or Groups can ethically, and should ethically compare Private coverage with Government coverage and that will undoubtedly eliminate the Government as a competitor.

          The opportunities in this field should be incredible. Were this 1974 and I was starting fresh in LTCi, I would be ecstatic. Okay, maybe in 1980, after I had “cut my teeth” a bit.

          As with Ann, Curt, I don’t know your age, though I now know how young Ann is, but if you are 50ish you have many years in which to “move” to this market and have a terrific future. I would guess that within a few years, this “nightmare” will be no more than a restless sleep and maybe even a good night’s sleep

          Curt, never hesitate to call on those who may be able to offer you ideas. I haven’t been an easy sale, and recognize that a lot of very hard work is yet to come, but for those who are involved in NAHU, do attend their local AHU meetings, and have good networks of colleagues with whom to bounce off ideas, the future doesn’t have to be bleak. In my comments in my post above, while I realize (now more than ever) that we must all get very serious about becoming less “Entitlement expectant”, we can change.

          Spence

      • “Not a single Government Entitlement has ever worked in America, and they won’t.”

        You’re right, Spencer, in pointing out the finanical problems facing Social Security, Medicaid and Medicare. However, Your conclusion that they never worked and they never will is, I think, is wrong. These programs and other entitlements (the GI Bill, unemployment benefits, welfare, SCHIP) have done tremendous good. Millions of individuals have survived because of them. Millions have made it through tough times in their lives because of these programs. They’ve saved lives, kept families together, provided seniors with a more dignified life than would otherwise be the case, enable people to obtain education, and more.

        Before people get too upset, I recognize that some people game the system or become overly dependent on them. I also believe they are in the minority. For the vast number of people who have had to rely at some time on these programs they have been both critical and appropriately used. This doesn’t mean, given the aging population and other demands on government that the programs don’t need fixing with modifications that will be, for some, difficult to contend with. They do need fixes — as they have in the past. And they will always need to adapt to changes in demographics, societal expectations and the harsh reality of actuarial tables. But returning to the pre-1930’s era when the American safety net was virtually non-existent? That’s something I believe few Americans would accept, let alone support..

    • Rick, thank you for asking the trillion dollar question. And I obviously don’t have the answer. America tends to work through these challenges eventually. It often takes someone from the “other side” to find the solution (i.e., Ronald Reagan’s tax increases; Bill Clinton’s welfare reform). And implementing those solutions is rarely met with universal glee or approval.

      To put this in context, bearing the financial burden of health care would be a huge national challenge even if the Patient Protection and Affordable Care Act had failed. Providing health care for employees has put American businesses at a big disadvantage relative to foreign competitors. The cost of Medicaid and other health care programs is a huge drain on state budgets, diverting needed funds from education, safety and other important governmental priorities. Cost shifting resulting from the uninsured adds roughly $1,100 to every insured American’s premium bill — a hidden tax, but a real tax nonetheless.

      The one thing that Democrats and Republicans seemed to agree on during the health care reform debate is that the status quo was unsustainable. There was also wide acceptance that doing nothing had a huge cost. Could the PPACA done a better job? In a lot of ways absolutely yes. But regardless of what was done — or not done, America and Americans would have paid a high cost. This doesn’t excuse anything, but context does matter.

  7. The American healthcare system is undergoing a transition of epic proportions.

    Too bad the politics of private vs public healthcare gets in the way of doing what’s best for the country as a whole.

    For both sides, ideology seems to be more important than the health of Americans

    This article – The Tea Party Guide to Health & Fitness – was written to bring out that debate, and if you look at the comments, it is clear to see that a lot of people have their identities wrapped up in their politics.

    http://www.healthhabits.ca/2010/10/21/tea-party-guide-health-fitness/

  8. “When thinking about the Patient Protection and Affordable Care Act, intense revision was, and is, inevitable. No law seeking to reshape America’s health care system would get it right on the first try. Politicians may proclaim “Mission Accomplished” when speaking of legislation (and wars), but the reality is the goal is never achieved perfectly and refinement is always needed Usually there’s a passage of some time before the first attempt to address a problem and subsequent efforts. Changes to the Patient Protection and Affordable Care Act are likely to start much sooner. I’m thinking early January 2011.

    You are no doubt, correct, Alan.

    In the meantime, until changes are made to benefit the Insurance Consuming Public, what will happen to those many Agents/Brokers who will have been irretrievably harmed, and their families harmed, by this poorly thought out experiment? Shall we consider passing another Stimulus Bill, for Insurance Agents? Maybe, in the $50Billion range? I don’t mean to sound like a Smart-a$$. I am quite serious. What will it take to make their world, “whole” again? Those in their 50s, 60s, and even 70s, whose working careers are virtually over.

    • Ann,

      You speak, write, with great articulation. Your simple answer to Alan’s questions was a “Yes”.

      I don’t know your age. You may have many years of earning power ahead of you. Many of our colleagues, do not. What solutions do you recommend for them, to “insure”, “assure”, that their world won’t have just ended, before they get a chance to recover? What do you recommend to those many thousands of our colleagues?

      BTW, I am not one of those who has a problem. I retired at age 60, and am now age 65, but I really care about our colleagues, and I hurt for them. So I am very sincere in my queries.

      How will they regain their futures?

      • Ann,

        It is not my intent to ask you questions that none of us can answer. Clearly, we will have, have already had, colleagues who futures will be and have been taken from them. A 60 year old simply won’t be able to “start over”, or change with what is now a very limited market.

        Perhaps my knowing a number of those “casualties” has made me far more sensitive to these market changes than would otherwise be the case.

        I do think that those such as Alan and myself are fortunate to have the “Lion’s share” of our careers behind us, and to have done well in our careers. I will admit that I don’t want to think that all of those years working to help others (many of us really do) has been in vain.

        • Spencer –

          I am sure nothing you have done is in vain. You are seasoned and experienced, your career is exemplary, your volunteer work is gracious. I’m quite certain the bureaucrats underestimated and undervalued your contributions. But a solid footprint leaves its mark for a generation. They may have “erased” your work on the surface, but they can’t erase your legacy. They can’t undermine the influence that remains in your power long past the day in which they tried to silence you. For instance, you are still publishing it today, on the world-wide-web. We hear you. The next generation hears you.

          How old am I? Fifty-two and not ashamed of it. I started in insurance at age 22 as a fluke (needed a job after studying journalism in college and took a temporary clerical job in an insurance agency.) I’ve never left insurance, and now 30 years later I have a few gray hairs (colored blonde of course) and a touch more wisdom.

          I’ve always taken on a challenge. I started my own agency at age 28, when NO women did it. I think I was too naive to know better. In AZ, there are about 32,000 licensed health insurance agent/brokers, but only 500 of us do the bulk of it, and there are only a handful of women who do what I do. There certainly are women in health insurance. Some work for the (male) agency owner, large numbers of women work for the insurance companies, and some women produce mostly individual/family plans. But few women own the agency which they started from scratch, take the lead, and sell mostly group insurance. So I must be pretty tough, huh? Actually, I learned to use the gentle caring graces of a woman to my advantage.

          So why did I tell you that? To tell you there are more disadvantages than just age that must be overcome. And as for age, I have 13 years to age 65. I also thought it helpful to give you insight into why I’m so optimistic, why I like to encourage the downtrodden and worried, and how I also know what it’s like to take on a challenge. I’m a foster parent, Spencer. My husband and I take in abused, neglected, traumatized, needy, children and love them into health. We “show them the way” out of a gloomy world of hopelessness and tragedy, into a lifelong path of assurance and stability. In Arizona, you’re not allowed to adopt the foster children if there is any biological family member who is qualified and willing to take the children. But we had the glorious privilege of adopting the last three kiddos. Just 17 days ago, on October 6th, my husband and I adopted them. The oldest boy just turned 3 years old and he’s been in foster care since age 4 months. The next boy is 22 months old, and we’ve had him since he was 5 months old. The little girl is a month younger at 21 months old, and we’ve had her since she was 9 weeks old. I’m 52 and my husband is 54. We have 3 little ones in diapers. I know how to take on a challenge. My mentally retarded sister has lived with us for 10 years. I know the worry of making enough money to support others. I know what it’s like to worry about employees who also need job security. I understand. Not just surface understanding. Deep, experiential understanding.

          So, maybe that explains my “optimism” a little more. Weeks ago, one of you called me a “soldier” and I thought that was very funny. Very true, but very funny. I guess I am a soldier. A stiff challenge hasn’t brought me down yet. But I must tell you that at the age of 52, I’m not as strong nor as gung-ho as I was. I don’t take on every challenge that comes my way. I analyze my options, see what I can realistically do, and walk away from the rest. Yes. It’s possible (probable) that some of our colleagues will walk away, and some will be devastated. I cringe for your friends in their 50’s and 60’s, who fear starting from scratch. Not everyone is a soldier, nor should they be.

          PPACA ruined many careers. Doctors are afraid of going out of business, too, or not being able to pay their student loans. Doctors who studied for 10 years post graduate to become Primary Care Physicians are facing compensation at the level of Plumbers now. They are offered “a volume of new business in 2014” the same way we are, and they feel the “whooosh” of empty air blown at their faces like we do. We fear the restrictions of exchanges, they fear the restrictions of government boards who manage health care. Our commissions may dive, their Medicare and Medicaid fee reductions are ruinous. Doctors fear domination by hospitals & clinics under the new ACO rules. Medical tech equipment providers may go out of business under PPACA. The 80% MLR affects a wide array of industries that provided services to insurance companies from Advertising to Printing to IT Tech to Agents. In this economy (outside of PPACA), real estate agents are ruined. Families have lost homes to foreclosures. Investor’s stocks and 401k’s have been decimated. Mortgage brokers are delivering pizza now. Every group client I have who has any relation to the construction/housing market is hurting big time. Careers are ruined, hopes devastated, families damaged, retirements lost. None of this is fun. All of this is tragic. Much of this was AVOIDABLE! PPACA was avoidable. Ruination of insurance agents’ careers was avoidable. No, let me restate that. Ruination of insurance agents’ careers IS avoidable, not WAS avoidable. The Exchanges aren’t operational yet, the commission drop may not be as bad as feared, changes will still be made to PPACA, etc. The devastation of our careers is not a past-history fact yet. It just hovers over us like a tornado over Kansas.

          This will be a hard concept to explain, and let’s see if I can do it gracefully. When I listed all of those who are facing wreckage in their financial lives, it can be viewed as unsympathetic to your friends who are age 50-65, and it could sound like, “Ya, pal, join the crowd, everyone’s hurting.” But that’s not what I meant. I meant it as a wake-up call out of hopelessness.

          Age is a disadvantage, not a death blow. Being a woman in this field is a disadvantage, not a death blow. There are other elements of PPACA that appear to be a death blow to anyone who can’t muster the strength to view it as a challenge instead of fatal. Here’s the key – If someone is not up for the challenge, and views it as “the end”, then it probably is the end for that person. And that decision is okay. It’s logical and reasonable to analyze your options and choose to walk away. It takes courage to revamp your business model and modify to meet new realities. Not everyone at the age of 52 or 62 has that strength at a time when retirement should be just a short walk away. That’s true, and I won’t undermine the tragic reality of it. Nor can I undermine the reality that some, at age 52, 62, 64, will grab the ring with gusto, while others at the age of 32, 37, 44 will give up. I’m careful about my “optimism” and the audience to whom I address it. It can be “helium filled hype” to some and a song of encouragement to others. It depends on whether you really evaluate your circumstance as a death blow or as a disadvantage.

          You asked me, “What solutions do you recommend for them, to “insure”, “assure”, that their world won’t have just ended, before they get a chance to recover? What do you recommend to those many thousands of our colleagues?”. Gulp. With a lump in my throat, let me suggest that they look at this loss as grief. A devastating financial disaster ranks nearly as high on the emotional grief scale as a death in the family. Grief brings anger, loss, hopelessness, fear, depression, withdrawal… Spencer, seeing your friend face this loss brings the same type of grief to you, too, attendant with anger, loss, hopelessness… What would I suggest? I would suggest a business coach who can lift your friend from hopelessness to a clear path for the future. Perhaps the clear path for the future is to walk away from this particular challenge. Perhaps a clear path for the future is to find just one attainable goal that matches your friend’s strengths and abilities. If your friend can see even one opportunity to turn this into a success, the hopelessness can fade and courage rise. If he can see three realistic, obtainable, common sense ways to succeed in this new world, his courage will be paired with a sense of security. In a comment to Alan’s prior post “Why Brokers Will Survive Health Care Reform’s MLR’s Provisions”, I listed a bzillion opportunities for success hidden in the new world created by PPACA. No sooner had I hit the “submit” button, then I began thinking of more sales opportunities, one after another. Opportunities abound to those who see them. With all respect, I suggest that your friend seek wise counsel from a business coach, a counselor, or someone else qualified to help him see it. He needs to see realistic honest opportunities, not hype, and he needs to see opportunities that match the abilities of a 60-year-old, not a 28 year old. If he can see it, his whole world won’t appear to have just ended. His only next step is to DO IT, not just view it.

          And, finally, I’ll answer your question of why I simply said, “yes” to Alan’s post. Well, before I tell you the answer, let me tell you a funny story. At an insurance company meeting, the CEO told us he answers every phone call not with “Hello”, but with “Yes!”. His answer to everything is “Yes!” If “Yes” isn’t possible yet then he’ll find a way, but “Yes” is the answer to any request. After he spoke, an underwriter at the same meeting leaned over to me and said, “I answer the phone, ‘HELL NO!!'”

          So, all jokes aside, why did I simply say “Yes” to Alan’s post? Because I write too much, Spencer!

        • Ann,

          Ann, You write beautifully and I am very motivated after reading your posts! You’re a hard act to follow!

          Here’s to brokers who are “hoping for the best, but preparing for the worst”: Join NAHU (National Association of Health Underwriters) and start contributing to the PAC (Political Action Committee) and your local state chapter’s PAC. (If you’re already a donor, thank you!)
          As Alan pointed out in an earlier blog, NAHU continues its legacy of advocating for brokers at virtually every important meeting related to HCR on the federal level. The stakes are high–we desperately need to fortify HIPAC funds. As an example of the importance of supporting the state PAC– in California, increased PAC dollars are needed to fuel our fight to preserve the roll of the broker in the exchange.
          If every broker in America contributed just $10 a month to both the national and their state PAC, we would arm Janet Trautwein and our state leaders with the resources they deserve and desperately need! Log onto http://www.nahu.org for more informaton, and let’s do this!

        • Ann,

          Rarely have I read such an uplifting message, articulate and eloquent, and filled with Hope! I think you must be a true gift to all who know you.

          You are right, of course, in all that you have said. I don’t have to tell you that I have always “Taken Lemons and made lemonade.” I would guess that you already know that. No one really makes it through a 40 year career without having to ascend from an “abyss” a few times, and simply (no, it isn’t simple, but once done, it is easy to wonder what “took you so long”) find the right path, if not through, then around the obstacle that has been presented you.

          I won’t talk about my experiences, yours are far too fascinating, and your philosophy so uplifting, that I can honestly say that while reading your words, I teared up. You actually reminded me, of me, not long ago.

          Yes, women have had it more difficult than we men. It is a phenomenon I will never understand. Women have always been my primary mentors in my life, beginning with my mother. In my many years of serving with NAHU and WAHU I became known as the guy who encouraged promoted more women to ascend the chairs of our boards and become State Presidents than any other. It wasn’t totally altruistic. I’ve always felt that the mark of a good leader is one who surrounds him/herself with people better than you, to help advise and support that leader through difficult times. It never, not once, failed to work. We men have a serious drawback, we can’t multi-task. Women can, see a broader picture, and can offer so much more than we men. Just in case you’re wondering, I’m 150% Heterosexual, though I have many friends who are not, and find their insights, partly due to the travails with which they’ve had to contend, to be truly valuable.

          Good grief, enough. “Brevity Challenged” condition kicking in again. I’m glad that you feel that you suffer the same disease, though I think you express yourself with far more to the point articulation than do I.

          Ann, you have honestly left me feeling far more hopeful for the future of our colleagues than I did before reading your words. Alan’s good, but he is a man. And those my age can “begin anew”. Were I facing the issues facing our colleagues, even today (at my tender young age of 65), I’d be out there fighting to “better our lot” as I always have. It is one reason I continue to stay involved. I truly love this business, and I am passionate about it. Thank you for reminding me of the many reasons that I am.

          In my future posts, Ann, I’ll try to add to that wonderful list of yours showing those who feel that they have been “put down”, the way up.

          What a great way to begin a Sunday!

          Spence 🙂

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