Health insurance advisors, independent agents and brokers, consultants and employee benefit specialists combined forces again recently to voice their concerns over the single most important issue for insurance providers today: opposition to a public insurance option as part of any national health care reform.
More than 1,000 insurance professionals from 49 states visited more than 400 Senate and House offices last week as part of the Health Insurance Agent & Broker Alliance health care reform fly-in on Capitol Hill.
Their efforts didn't go unnoticed, according to Robert Rusbuldt, Independent Insurance Agents & Brokers of America's president and CEO.
"Our message was heard," Rusbuldt said, adding that many national media outlets, including ABC, CBS, Fox News and the Washington Post ran stories covering the group's efforts.
While their message against a public option rang clear, whether their efforts will make a difference remains to be seen.
"When you have the president of the United States and the Democratic leadership supporting a government-run health insurance plan, it's going to take a lot of work and lot of education for the decision makers to understand that government actions have consequences in the real world marketplace," Rusbuldt said.
"I think we made a big statement on Capitol Hill," he added. "The question is, will it be enough to make a true difference" particularly with Democratic members of Congress?
Those possible "real world" consequences are what are driving members of the Health Insurance Agent & Broker Alliance to act. The alliance is comprised of AHIA-NAIFA Health and Employee Benefits (AHIA), The Council of Insurance Agents & Brokers (CIAB), the Big "I", the National Association of Health Underwriters (NAHU), and the National Association of Insurance and Financial Advisors (NAIFA).
Government-Run Health Insurance
The primary concern agents have with a government-run health insurance option is that it could mean unfair competition that would undermine the current private health insurance delivery system in which agents and brokers play a major role.
"We believe that the way some of these legislative proposals are emerging that it will not be fair competition. Will a government run health insurance plan have to pay premium taxes? Will a government run health insurance plan be able to be sued for malpractice? Will a government run health insurance plan be required to purchase private reinsurance in the marketplace? I can give you 15 examples of areas where typically the government doesn't compete with the private sector in a fair and equitable way," Rusbuldt said.
If those advantages are significant, the result could be that private insurance companies would be driven out of business, Rusbuldt maintained. "You can't compete with two hands tied behind your back. That's not the way the private sector works."
Proposals currently under consideration on Capitol Hill provide an uncertain role for the agent in so-called exchanges, the phase-out of existing small group plans, a new government plan and an employer play or pay requirement, according to Cliff F. Wilson, NAIFA president.
"We must build on the strengths of the current health care system in this country, reduce costs, get every American covered and improve the value of our health-care system-- without resorting to new government programs or jeopardizing the high quality of care we enjoy and expect as American consumers," Wilson said.
Competition from a public plan is not agents' only worry. Financing under the House version of reform is particularly concerning for agents, Rusbuldt said. Small businesses that now pay tax rates of 35 percent could end up paying more under some proposals.
"Under the House version that rate for small business owners would go to 45 percent and yet the largest companies in the country still pay at 35 percent," Rusbuldt said. "We are going to finance health care reform on the backs of small businesses. We are going to require small businesses to mandate that they have to provide insurance for their employees and in the case of independent agents; we are going to take away their health insurance business. That's a huge burden."
While members of the Alliance also joined forces during health care reform discussions during the Clinton administration in the early '90s, last week's fly-in was much more extensive, Rusbuldt said. "We've work very closely with other groups on banks and insurance issues but not on this scale; probably ever."
The Big "I" alone had more than 300 agents represented on Capitol Hill, Rusbuldt said. "We are very pleased with the total number," he said.
Independent agents may be uniquely positioned to discuss the issue because health reform would affect them three-fold.
For one, independent agents sell and service health insurance for both their business clients and individual clients. Two, they are employers who have to purchase health insurance for their employees. And three, independent agents are consumers of health insurance themselves.
"So when they view legislation they are viewing it from three different perspectives and that makes independent agents uniquely situated to discuss this issue with members of Congress," Rusbuldt added.
Congress has not settled on a final plan. Last week, the House unveiled its version of reform while the Senate continues to move forward on a dual track pending in both the Committee on Health, Education, Labor and Pensions and the Committee on Finance.
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