Will Some Middlemen in Health Care Disappear – NAHU
This from Greg Scandlen
National Association of Health Underwriters (NAHU)
The biggest puzzle of this season is NAHU. Now, many agents and brokers have been saying for many years that people should be required to buy coverage and that insurers should stop denying applicants. It is an understandable sentiment. It would certainly make the job of an agent easier. But there is a price to be paid.
Whenever reformers talk about cutting administrative costs, what they really mean is cutting out the middleman. That is the low hanging fruit of administrative costs. In this case, with the loss ratio requirements and the insurance exchanges, there is virtually no role for agents and brokers (known collectively as “producers’) and no money to pay them. Indeed, the job of the producer has been made so easy, there is no longer a need for them.
NAHU has sacrificed a lot to get its seat at the table. But it has very little influence, so I’m not sure what good it has done. On the eve of the Senate cloture vote, NAHU president Janet Trautwein sent a strongly worded letter to the Senate complaining about what is in the bill. This was literally just hours before the vote. Kind of late in the game.
One of her biggest complaints was that the bill was insufficiently punitive! She wrote, “Under this legislation, millions of healthy individuals will likely find it more financially advantageous to forgo coverage until they are sick and then utilize the guarantee-issue protections to temporarily obtain coverage and then drop it again.” That is undeniably true. It is in fact exactly what I plan to do if this thing ever goes into effect. But her remedies are draconian. She would:
Make financial penalties “in line with the actual cost of coverage.”
Apply late-enrollment fines “in addition to other penalties for those who have more than a 63-day break in coverage.”
Have an annual open enrollment period so people cannot just come in and out at will.
Require employers to help with enforcement through automatic enrollment.
Require employers to reveal to the government anyone who opts out of the employer’s plan.
“Requir(e) coverage verification as a condition of receiving services at facilities like the state department of motor vehicles, schools and hospitals.”
Now this is a peculiar way to represent the interests of one’s clients. But NAHU doesn’t like to be criticized. The last time I questioned its strategy, they complained to my employer, and then told me to stop sending this newsletter to anyone employed by NAHU.
It’s a pity. I have always supported the role of brokers and defended them against attacks by single-payer advocates, over-zealous regulators, physicians, hospital administrators, and other critics. I think they serve an important role, especially with small employers who don’t have the time to become well informed about their coverage options. I think it’s tragic that NAHU is letting them down.
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