I have been purchasing life and health insurance since 1986. Early in my career I was an OK life insurance sales producer. After about two years, I seemed to hang on to a brick wall and the Lifetime Sales ceased. It was then that a successful, seasoned producer took me under his wing and told me to get health insurance for small business owners, then look to life and disability insurance opportunities.
In 1988, it was relatively easy to find an insurer with a lower price and equivalent or perhaps better benefits, as there were over 15 companies to work with and multiple plan designs within each company. As the sales started to grow, I developed a good monthly income while the clients in the group paid their bills.
Roll the clock forward to 1990 and here in my state of New York things have changed rapidly. At the time, a very large, well-known not-for-profit insurance company found itself in dire financial straits. They petitioned New York Governor Mario Cuomo, accusing him, unlike other insurance companies, of being forced to accept all applicants without asking medical questions and that other companies were “selecting. »The best candidates.
I guess the fact that they were a non-profit entity and therefore had advantages that other companies have not failed to enter into the discussion. Cuomo advocated for community scoring and a level playing field, demanding that all health insurance companies 1) charge the same price for the same health product regardless of gender or age, and 2) prohibit asking medical questions to determine acceptance of candidates.
By this time, most insurance agents stood on the sidelines and watched this government intrusion and did nothing. It’s no surprise that when I say that when the Affordable Care Act was passed by Congress in 2010, I got a feeling of déjà vu.
In New York City, the net impact of the Community Rating Act was that there were far fewer companies to offer coverage to clients. Products from company to company were very similar in price for a given benefit profile, so it was difficult to compete and help customers on the basis of price. For individuals, there were a handful of products that were more expensive than their predecessors by large margins. Insurance companies really had no actuarial basis on which to base their pricing.
In 1993, then President Bill Clinton announced his intention to create a national health care plan. While Clinton was a popular president at the time, even his charisma failed to get this item on the legislative agenda.
When the ACA was passed in 2010, the Washington lawmakers who backed it never calculated that many insurers would exit the markets rather than try to do business under the ACA’s rigid guidelines. The companies that remained (especially in the home market) began to offer a reduced choice of providers in the networks on which their plans depended. The question here, of course, is how have the interests of consumers been served by these narrow networks?
I should also note that the ACA has made millions of dollars available to encourage the start-up of new health insurers called cooperatives to add to the offering for the public. But, across the country, these plans failed one by one. But since September 2020, only three of the 26 The cooperatives of the Obamacare era have remained in operation.
The question then becomes what role did the health insurance agent play in the transformations that took place between 1990 and 2010?
The health worker is an advisor responsible for interpreting the legal wording that appears in a health insurance contract to a consumer who relies on the agent for advice. With the arrival of ACA, the consumer market has become familiar with new terminology. including exchanges, browsers, assistants and brokers.
In my opinion, brokers are required to pass instructions and tests to obtain a license from a state to sell health insurance products in that state. Brokers are also required to adhere to ethical standards of conduct and are required to purchase errors and omissions insurance, assistants and mariners are not required to purchase.
Changes in the market
Beginning in 1990, there was a regular closure and amalgamation of general agencies that served brokers working in the health insurance market. Many brokers who relied on the revenue generated from their health insurance sales simply gave up as commissions were reduced or eliminated and the limited number of products that remained were priced so similarly that transferring a client from ‘one company to another with the intention of replacing the existing coverage at a lower price with another operator offering equivalent benefits at a lower price was simply not working. Many long-term agents gave up health insurance and switched to other products or left the company altogether.
The question I’m raising here is, how is the public being served by all of this? I think the public has widely adopted ACA for three reasons.
1. President Barack Obama has been very convincing in his appeal to the public. Its promises of lower cost, keeping cherished doctors; and no exclusion based on medical profile resonated with much.
2. People misinterpreted the word “subsidy” and heard “no cost” or “cheap”. The point is, premiums under the ACA have increased dramatically.
3. Many liked the idea of not being excluded from coverage because of a pre-existing condition or unhealthy lifestyle. A point here is that the ACA, by eliminating medical questions, has also provided a hidden incentive for people not to maintain a healthy lifestyle, as the barrier to accessing health insurance has been all but removed. .
Brokers were tasked with explaining to consumers all of the changes that occurred in 1990 and again in 2010 as if we had something to do with the changes. I have seen the frustration of people when I explain that a particular provider does not choose to be in the network for the plan they choose. Just before Thanksgiving Day in 2015, I was forced, like many other brokers, to find alternative coverage for many people covered by one of the ACA plans who went bankrupt despite the fact that the federal government received millions of start-up capital. Incidents like this have happened across the country.
What the government can do
I am in favor of a very limited role for government in health insurance, but I think government can play a very big role in health care. As time has shown, the federal government is not afraid to spend money. The problem is that they often don’t spend the money efficiently or effectively.
But I think I see a way for the government to really improve the health care system in our country.
I would like the government to offer a basic menu of health benefits without asking any medical questions. This coverage would only apply in government-run medical centers. The centers could be set up using part of the vacant commercial real estate that exists in our country. These spaces could be renovated into first-rate medical facilities. My plan would require all aspects of the center to be outfitted with furniture, medical technology devices, computers, and any other item that goes into a medical facility be 100% made in the USA.
The facility could be staffed with a team of doctors and nurses from a group of people who enrolled in their first year of high school to train for careers in medicine. Admission to this program would have very high standards. The program would offer several incentives – in-program training and a diploma. The government will guarantee you a position in one of its facilities. Agree to work for five years with a good salary with benefits and then you can either stay in the government system or go it alone. If you decide to open an office, the government will give you a loan at very low interest rates and also provide you with malpractice insurance at no cost.
With regard to patients, medical centers would be equipped to meet all forms of medical needs. Patients would pay a means-tested co-payment for various forms of care. To compensate for catastrophic claims, participants would have access to mandatory stop loss coverage – which is essentially what Medicare supplements already are.
Through a combination of payroll taxes, employers would partially subsidize coverage. I believe that of all the money the government spends on providing subsidies, reimbursing insurance companies that have lost money in the individual market and unnecessary expenses in so many other ways, a system like this that I am considering guarantees that those pursuing a career in medicine will have the means to enter private practice if they so choose.
This is how I imagine patients would have the freedom of choice. If you are in good health and are looking for low premiums, you can get medical coverage that could be designed without all of the cost-increasing ACA requirements. If you cannot pass the medical underwriting, then you go to the government plan.
I believe that health insurance agents could be brought in both to help design a government program that works and to serve as recruiters for coverage. Health workers would also be the ones offering medically purchased plans.
There are many forces at work in our country against the future of medicare. If we don’t begin to find a meaningful role for our existence, the combination of politicians, special interest groups, insurance company bean counters and lack of public concern will eventually lead to the end of health insurance agent.
Jerry Cohen is a Life and Health Insurance Advisor in Port Jefferson, NY He can be contacted at [email protected].
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