Health Care Reform And Mirror-Colored Glasses

There’s nothing wrong with looking at health care reform through mirror-colored glasses. It’s very human and downright American to ask “what’s in it for me.” In this country we’re all entitled to seek our self-interest. The role of government is to balance those interests, to prevent the excesses this approach can create, to find common ground that benefits the many while protecting the rights of the few.

A few weeks ago I was interviewed by a reporter for Marketplace, the business program produced by American Public Media that airs on NPR.  The interview was far ranging, covering the latest developments in the  health care reform, it’s impact on brokers and others employed in the health insurance industry and the like. (It was “far ranging” in the sense. as regular readers of this blog know, that the reporter was kind enough to indulge my penchant for expressing opinions about health care reform).

The  reporter, Joel Rose, is a frequent contributor to Marketplace and other programs. He did his usual job of providing an interesting, fair and accurate report. He certainly presented my comment fairly (which was about the likelihood lawmakers would be unable to maintain fair competition between a government-run health plan and private carriers).

Even  given all we talked about, I admit to being a bit puzzled by the Marketplace report’s  focus. The story, at least on the web site, is entitled “Aetna workers fret about reform plans” and mostly concerns the possible job losses health care reform could cause in the insurance industry. It seemed to me, at first blush, to be an awfully parochial topic. Who cares what reform does to those in the insurance industry?

Then I started getting emails and calls from folks who heard the story. They cared — and had the mirror-colored glasses to prove it. Further it became clear that  Mr. Rose had raised a significant question. Should policy makers working on health care reform be concerned about the fate of the roughly 500,000 people ho work in the insurance industry?

Some of those who emailed pointed out the irony that the Obama Administration was, on one hand, spending billions of dollars to create jobs on one hand, while, with the other hand, it was planning on spending billions of dollars to eliminate jobs in the insurance industry. (As Mr. Rose noted in the story, however, there will be new jobs created in a post-reformed health insurance industry).

Still, the question is,  should it matter? Should health care reform be designed to save job categories?

My answer, at the risk of getting flamed, is that the only jobs health care reform should protect are those who add value to the system. If insurance company employees or health insurance brokers or anyone else cannot justify the cost of their services, the government has no responsibility to save their careers.  The Declaration of Independence calls for protecting life, liberty and the pursuit of happiness. There’s no constitutional right to a particular career path — just ask a buggy whip salesman if you can find one.

The reason I work so hard on behalf of preserving a role for brokers in America’s health care system is because I believe we do add value to the products we sell. Even after reforms, consumers will need the advice and advocacy licensed professionals provide.  Just ask the small business owners who bought health insurance through a state-run purchasing pool operated by the state of California in the 1990s. Roughly two-thirds of them paid a surcharge for the benefit of working with an independent broker instead of dealing directly with the state. 

Which is why I find proposals by some lawmakers to empower Department of Motor Vehicle clerks to sell health insurance so insulting and misguided. DMV employees are fine, bright people. But they’re not trained to understand health insurance or to help consumers battle health care coverage providers (private or public) when necessary. Consumers deserve better.

That lawmakers fail to perceive the value brokers provide is, perhaps, disappointing, but not surprising. Many, having always been insured through programs for government employees have never worked with an agent. That’s why the efforts of the members and staff at the National Association of Health Underwriters is so important. They are working tirelessly to educate legislators about the role of brokers while also providing the producers’ perspectives on various health care reform related issues.

I testified before several Congressional committees on behalf of NAHU during the debate over Clinton Administration’s health care reform plan. At one I was asked what the Clinton plan would mean to insurance producers. I said the Clinton plan “was both bad news and good news for health insurance agents. The bad news is we’d be out of a job. The good news is our health insurance would be free.”

It was a clever line that drove home what was at stake for the committee member’s constituents who sold health insurance. But what I said then I believe now: health care reform should not be about protecting brokers or any other profession.  The purpose of health care reform should be to create a health care system that will benefit the American people for the long term, a criteria it is difficult to argue the status quo will do.

The Clinton reforms failed because they were ill-conceived and ineptly handled. President Barack Obama’s reform efforts will be successful because the need for change is more obvious and he is wisely willing to accept what is, from his perspective, a partial loaf.

The coming reforms will change the way brokers work, but will not, and should not, eliminate them.  Brokers should survive not because we have a right to, we do not. We should survive because American consumers view health care reform through mirror-colored glasses, too.

13 thoughts on “Health Care Reform And Mirror-Colored Glasses

  1. Alan, you are a great American in this great debate, keep up the good fight.

    The sad fact is that Obama care will slowly end your gig as a insurance broker. People will slowly check out the exchange and figure out which policy to buy, without your help.

    Look what happened to travel agents, they are mostly out of business because of the internet. I buy my tickets directly and people will buy their health insurance directly from the exchange.

    Sadly we have two main drivers of higher health costs that are only going to get worse…First. the fact that the American people are not very healthy. We lead the world in obesity, have higher incidence rates of most chronic diseases, alzheimers is projected to double, diabetes is rapidly on the rise. In fact the bill for all these poor lifestyle choices has not yet come due. The future is bleak. Secondly….we have an ageing population of baby boomers raised on drive thrus, couch potatoe habits, tons of exposure to dirty air and toxins, and will demand their medicare. The driver of higher costs is not only that most of the baby boomers are in poor health, but that the baby boomers have the most assets of any group in our society, and this wealth will fuel demand for MORE health care, not LESS.

    I said it before and I’ll say it again………IF YOU THINK HEALTH CARE IS EXPENSIVE NOW>>>> YOU AINT SEEN NOTHIN BABY

    • I can just see the busy contractor who has 8 employees searching the Exchange for the type of coverage needed, comparing that coverage to that available outside the Exchange, and then enrolling inside the Exchange and explaining that coverage to those employees. Then each year, taking his time away from the job site to re-check to make sure he has the best plan in the Exchange and comparing that with what’s available outside the Exchange.

  2. Although your article is direct and well spoken; knowledge is not a difficult thing to obtain. Every book taught in any college can be purchased online. To learn how insurance companies and agencies save money is not hard to understand. An industry is an industry, the only difference between businesses is the product you sell, and the jargon used, and the target audience of which you are selling to. The public option is creating another layer of competition for insurance companies. You may say it is unfair competition, well that may be, understand that the president has already made statements that he expressed concerns about it being unfair. But understand that just because you can afford healthcare does not mean that your local coffeeshop employee can. And while most of your paycheck goes to a Roth IRA or a 401k or to savings account, these people live check to check trying to get ahead in the economy. We are not able to afford healthcare. I am one health bill away from being financially broke. So if this provides the 50 million people like myself who need some form of coverage and keeps me from going broke, I am for it. Not to mention, if I am broke I can no longer spend money with any business, thus the economy worsens when people can not pay for their healthcare.

    • I compleatly agree with you but if the healthcare bill is watered down to the point of not containing a public option then I think we should not have any bill because if there is no bill then change will be forced in the future because what we have now is not sustainable.
      Although, if the Republicans get back they will fix it in favor of private insurance against individuals, Drs, etc.

    • What does the Public Option have to do with keeping you from going broke? With the Public Option you still have to pay the premium. If that premium is less than private companies due to unfair competition it still must be paid by you. One of the unfair things the Public Option will do is underpay providers, similiar to Medicare. That underpayment is then cost-shifted to the private carriers that other people then must pay. Do you want others to help pay for you? There is no free insurance, the same as no free lunch. Must we also make the mistake of searching for that proverbial free lunch as France, Canada and England did?

      • Do not make the mistake, I know it is not free; but the point is having an option. Right now, I probably could not even have a choice of healthcare because of conditions. The second point is also that the plan will also be geared towards lower wage earners, thus allowing people with a limited budget, afford some form of healthcare. I was at the doctor the other day to get blood drawn for three different vitamin things, it cost over $400, for a blood drawing! This was a UW healthcare clinic. Tell me that is not ridiculous. They spin the blood in the machine, and the blood is then analyzed for chemical traces which now days is mostly automatic. So tell me where the money really goes? It is frustrated at the cost of Health care in general.

        Reason this, Health care company denies coverage of a 100,000 dollar surgery. Now the patient has to pay that, guess what… he can’t. Now where does that money come from? It gets passed down to the customer. In the end, we are all paying crazy prices for the dealings of the insurance companies. Ultimately, you have a choice between allow normal low wage earners have a plan that will keep the health clinics from having to collect on debts and pass on the debts, or allowing things to continue with the cost of health care the way it is.

        You say its the greatest health care system? I don’t have insurance. I need surgery. Health clinic will not do it because on paper I do not make enough money to appear as a “Good Investment”. Therefore I wont get the work done that I need. Does that sound like the quality of the “Best Health care in the world?”

        It is strange how all these European countries that republicans like to point out as “jealous of our healthcare system” don’t change to our system. Especially seeing that France had a system similar to ours and decided to change it.

        Pregnant mothers how does 3-6 months of paid maternity sound? Not in america is it possible. Of course its not a free lunch. But you are insulting the intelligence of the rest of the world by saying that they want our system. If they did, they would have it. Remember, we are a newer county than the rest, therefore they have had a longer time to figure out what works, and what doesn’t.

        • Sorry if I offended you. It is my understanding the health insurance industry supports guaranteed issue and no pre existing condition exclusions, as long as it is compulsory to purchase. What will be in the law to make sure the government option is honest and does not cheat? That’s my concern. You stated European countries do not change to our type of system. I would suggest you read the last Friday edition of the Wall Street Journal. France is attempting to be more like the USA, however when government plans are in place its impossible to eliminate them. Proof of that is the many failed bureaucratic departments we have and cannot seem to rid ourselves of them.

      • Well Rick,
        I’m healthy and I have insurance and morals unlike many on here. I’m willing to take it all away and live like barbarians again. Republicans hate truth and reality but will use half truths to try and confound the truth. Heres a little something for you.

        A Day in the Life of Joe the Middle-Class Conservative
        By John Gray

        Joe gets up at 6:00am to prepare his morning coffee. He fills his
        pot full
        of good clean drinking water because some liberal fought for minimum water
        quality
        standards.
        He takes his daily medication with his first swallow of coffee. His
        medications are safe to take because some liberal fought to insure their
        safety and work as
        advertised.
        All but $10.00 of his medications are paid for by his employers
        medical plan
        because some liberal union workers fought their employers for paid medical
        insurance, now Joe gets it too. He prepares his morning breakfast, bacon and
        eggs this day.
        Joe’s bacon is safe to eat because some liberal fought for laws to regulate
        the meat
        packing industry.
        Joe takes his morning shower reaching for his shampoo; His bottle is
        properly labeled with every ingredient and the amount of its contents
        because some liberal
        fought for his right to know what he was putting on his body and how much it
        contained. Joe
        dresses, walks outside and takes a deep breath. The air he breathes is clean
        because
        some tree hugging liberal fought for laws to stop industries from polluting
        our air.
        He walks to the subway station for his government subsidized ride to work;
        it saves him
        considerable money in parking and transportation fees. You see, some liberal
        fought for
        affordable public transportation, which gives everyone the opportunity to be
        a
        contributor.
        Joe begins his work day; he has a good job with excellent pay,
        medicals
        benefits, retirement, paid holidays and vacation because some liberal union
        members
        fought and died for these working standards. Joe’s employer pays these
        standards
        because Joe’s employer doesn’t want his employees to call the union. If Joe
        is hurt on the
        job or becomes unemployed he’ll get a worker compensation or unemployment
        check
        because some liberal didn’t think he should loose his home because of his
        temporary
        misfortune.
        It’s noon time, Joe needs to make a Bank Deposit so he can pay some
        bills.
        Joe’s deposit is federally insured by the FSLIC because some liberal wanted
        to protect
        Joe’s money from unscrupulous bankers who ruined the banking system before
        the
        depression.
        Joe has to pay his Fannie Mae underwritten Mortgage and his below
        market
        federal student loan because some stupid liberal decided that Joe and the
        government
        would be better off if he was educated and earned more money over his
        life-time.
        Joe is home from work, he plans to visit his father this evening at
        his farm
        home in the country. He gets in his car for the drive to Dad’s; his car is
        among the
        safest in the world because some liberal fought for car safety standards. He
        arrives at his
        boyhood home. He was the third generation to live in the house financed by
        Farmers Home
        Administration because bankers didn’t want to make rural loans. The house
        didn’t have
        electric until some big government liberal stuck his nose where it didn’t
        belong and
        demanded rural electrification. (Those rural Conservatives would still be
        sitting in
        the dark). He is happy to see his dad who is now retired. His dad lives on
        Social
        Security and his union pension because some liberal made sure he could take
        care of himself
        so Joe wouldn’t have to. After his visit with Dad he gets back in his car
        for the ride home.
        He turns on a radio talk show, the host’s keeps saying that liberals are bad
        and
        conservatives are good. (He doesn’t tell Joe that his beloved conservatives
        have fought
        against every protection and benefit Joe enjoys throughout his day) Joe
        agrees, “We
        don’t need those big government liberals ruining our lives; after all, I’m a
        self made man
        who believes everyone should take care of themselves, just like I have”.

        • This is a health insurance blog. I will not respond as to the cost, unintended consequences, cost effectiveness, and how these items listed might have adversely affected others, and if they were entirely non conservative ideas.

  3. Alan, if the health insurance market evolves toward individually purchased policies there certainly will be a need for expert advice in selecting and maintaining a policy. But wouldn’t it be an improvement if agents and brokers also evolved to fee based advisers rather than accepting sales commissions as compensation? Isn’t this similar to the difference between stock brokers and fee based financial advisers? There needs to be a fiduciary duty explicit in the relationship. Thoughts?

  4. Alan, one major problem is that most of the people in Washington never ran as much as a candy store.

    • Rick,

      You are so right on. We conducted a study in the WA State Legislature. Of the 70% Democratic majority in the House, only a few had ever “cut a paycheck” in their entire full time career (we have a part-time Legislature). that is a truly startling statistic. and these people make law to which we working folk must adhere.

      In Congress, they make law to which only the citizens must adhere; they follow only their own law, with all of their special benefits, insurance plans, retirement system, and so on. They’re not about to live under the law which they make for the rest of us. We really do need change, but not the kind of change lawyers would have us follow.

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