This article was originally written by and published in The Upstate Clutch.
“Why are you going to Washington DC and what do you hope to accomplish?”
“I’m going to try and effectuate change and save my industry.”
“I want to lobby those in positions of power in Washington D.C. to try and fix our broken healthcare system.”
“I absolutely love what I do because I have the opportunity to help people with something really important. Something that matters. Insurance. I’ve helped people avoid financial catastrophe because of the products I have. I want to have Congress reform the law because if they fail to do so, my ability to continue to help people is seriously threatened. Markets are collapsing. I’m concerned that if Congress does not work together to fix this law, I will no longer have the opportunity to do what I love to do in the health insurance world – to help people.
“What experience do you have in lobbying Congress?”
I had that conversation with a friend just before I embarked on my eight-day journey to the nation’s capital in mid-February. It was my mindset. It was my mission. It was my goal.
I left the Upstate with the hope that those people in positions of power would value the insights of an expert in the field, someone who has seen firsthand the faces of those helped and harmed by the Affordable Care Act, someone who understands exactly what is working and what is completely broken – someone who works on the street level and tackles the challenges of the law every single day. Mine is not the view of someone who works in the ivory tower world of those who often craft legislation, fostered through multiple think tank meetings and discussions. My view is a reflection of what I’ve heard from thousands of people like you.
I should probably introduce myself. I am Guy Furay, owner of The Insurance Source. If you are thinking, “hey is that Guy the Insurance Guy that I hear on the radio?” then you are thinking correctly. I believe that there is no one better positioned to offer valuable insight as to how to fix this broken healthcare system than the health insurance broker. The health insurance broker is the ONLY entity who sees the system as a whole, again from the street level. We are the only ones who touch every single constituency – from the customer to the doctor, the insurance company, the government and the pharmacy. Others have experience with a sliver of the healthcare system. We live and work in it, every single day.
Believing that there is strength in numbers, I sought out to find others who share my view. I was fortunate and privileged to find an amazing grass roots organization of health insurance agents. This group is called Health Agents For America (HAFA), and it was founded in 2012 by a dynamic leader named Ronnell Nolan. A leadership group of about a dozen HAFA members from all over America came together in Washington D.C. to work on helping those in positions of power understand what is happening on the streets and why a failure to act would be catastrophic to those who need individual health insurance.
Why is all of this needed?
In a nutshell, the Affordable Care Act is crumbling. There are many wonderful things in the law. Anyone who tells you that the law is ALL bad is either hopelessly biased or doesn’t understand the law. Meanwhile there are horrible and destructive things in this law. Anyone who tells you that the law is ALL good is either hopelessly biased or doesn’t understand the law. Whether you are a fierce advocate of the law or its most vocal opponent, it cannot be denied that the law has some serious issues. It cannot be fixed by tweaking at its edges because there are severe structural problems in the law itself. One thing is crystal clear. If Congress chooses not to work together and fix this broken law or repeal it and replace it with something else, the American people will suffer.
The “problem” is not the real problem
Just like when a husband asks his wife “Honey what’s wrong?” Sometimes the answer she gives him is just a symptom and it requires digging a little deeper to get to the real issue.
The biggest problem with the Affordable Care Act is that it did NOT address the actual disease of healthcare in America, which is the boondoggle of healthcare costs. Instead, it focused attention on the symptoms of the problem, which is health insurance. What is health insurance after all? It is simply the vehicle that allows people to afford health care. For example, when a $1 million dollar premature baby is born, most families do not have the financial means to be able to pay for the treatments the baby needs to survive. When someone has a major heart issue or needs a liver transplant and incurs $500,000 of medical claims, most do not have the ability to ever pay those claims. Insurance is the vehicle that allows people to seek the treatment they need.
The Affordable Care Act was primarily health insurance reform and not health care reform. Many of these reforms were needed.
- There were people who prior to the passage of the ACA could not purchase the health insurance they needed at almost any price due to a pre-existing condition. The guaranteed issue and no pre-existing conditions clauses of the ACA solved this problem for folks.
- Prior to the ACA, many families had a choice between putting food on their table and purchasing insurance. They simply didn’t have the funds to pay for insurance regardless of how much they wanted to needed it.
The Affordable Care Act solved these issues for these people, while in the process creating other issues for others.
But, the Affordable Care Act did not address the elephant in the room, which is health care costs. Any health care reform effort which does not have health care costs as the number one item on the agenda is doomed to failure.
One of the stated aims of the Affordable Care Act (ACA) was to increase competition among health insurance companies. President Barack Obama said ths to a Joint Session of Congress on Health Care in September 2009.
In this regard, the Affordable Care Act is an epic failure as 34 percent of all the counties in the country have a single option to choose from, while 70 percent of all the counties in the country have two or fewer choices with regard to individual health insurance and 5 states including South Carolina have only one carrier available in the entire state. Because all individual health insurance is rated based on the county level, this is the most appropriate standard of measurement i.e. Greenville County has a menu of products while Anderson County has a different menu.
The Rules of the Game Don’t Add Up
People will always act in their own enlightened financial self-interest. Take for example, a 30-year-old male in South Carolina. This guy doesn’t use much healthcare in a given year. He believes confidently that he is what we in the industry call “10 feet tall and bulletproof.” He is being asked to pay a rate of $300 per month for a high deductible plan or $3600 per year. Given that he doesn’t consider himself likely to use much healthcare, his question after I give him the rate is “What is the fine if I don’t buy health insurance?” Many, many healthy 30 year old males have laughed when I told them the fine is only $695 per year. And they choose not to purchase health insurance because if they do purchase it the costs are $3000 higher. Now, consider if the 30 year was instead diabetic. What decision does he make? Of course—he buys the insurance!
Put very simply, the cost to those who do NOT follow the rules has to be far greater than the cost to those who do follow the rules. Because the fines are not properly aligned, this leads to
The Healthy pay the exact same rate as the sick—An Adverse Selection issue
As described above, adverse selection is the scenario where those who are most likely to use the insurance buy the insurance in greater numbers than those who are not likely to need to use it. There is a fatal flaw in the concept of charging all people the same rate for the health insurance, regardless of their actual health. Consider, for instance, car insurance. If the rules are set that everyone pays the same rate for car insurance, this is a phenomenal deal for the guy with 17 DWIs, more tickets than he can count in a pile in the corner, and more accidents than he can remember. However, for the lady who never even has gotten a parking ticket, the rule doesn’t work out so well.
The Costs are Going Through the Roof—The Death Spiral
Because the healthy pay the same rate as the sick, because the penalties for NOT following the rules are less than the actual cost of following the rules, because of the adverse selection, and because of the dwindling choices in the market, individual health insurance rates for soared close to 30% across the country in 2017. Meanwhile, not only that, people are getting a far worse deal than they used to when they buy that insurance. For example, here in South Carolina, customers of BlueCross BlueShield no longer receive any out of state care, cannot use national chains like Walgreens or Rite-Aid, and these trends show no signs of abating.
HEALTH AGENTS FOR AMERICA WASHINGTON DC TRIP
Brokers from all across the country. Different political views. Different personalities. Different circumstances. But we all shared one goal, and that is: Do whatever we can to lobby for common sense reforms that actually preserve our individual health insurance market and allow us to do what we do best, which is help consumers understand and choose the most appropriate health insurance product for them.
Each of us is passionate about what we do and with good reason. We are the people on the street and we care about the people we serve.
Health Care Reform must be centered on actual Health Care Costs
Any attempt to fix this problem of Healthcare in America without addressing the real problem, which is health care costs, will not actually fix our system at all. The United States even spends 4 times as much on health care than other countries but does not have measurably better outcomes. In fact, in some ways we have even worse outcomes than the other OECD countries. More details here: http://www.oecd.org/els/health-systems/health-data.htm
The Medical Loss Ratio Provision of the Affordable Care Act is absolutely toxic and must be completely revoked.
The MLR indicates that the insurance company must spend 80% of every dollar of revenue on claims. This leaves 20 percent of total revenue for the insurance company for: Operations, Marketing Costs, and Profit Combined.
Again, a healthy dose of common sense is necessary to understand this provision. If you think a health insurance company is FOR PROFIT, just wait until you tell that company that they cannot make a profit. (Remember the pre-eminent goal of any business in any industry is to actually make a profit)
The MLR is not a realistic long term goal, and it has directly contributed to the merger frenzy among insurance companies, the exit of smaller insurance companies from many markets, the elimination of many excellent health insurance brokers (we cannot work for free) and much higher prices for consumers.
The Elimination of the Navigator Program
“Navigators” are unlicensed, unregulated people authorized to assist people with health insurance. However, they are forbidden by law to make any insurance product recommendations as they are neither licensed by any insurance department nor qualified to make any suggestions.
To compound the problem, navigators do actually make recommendations to folks. They do NOT undergo background checks, do NOT carry Errors and Omissions insurance, do NOT have any continuing education requirements and many may even have a criminal record.
Health Insurance Brokers, by contrast, are professionals in our chosen field. We take pride in helping people. Any insurance broker who has survived the open enrollment will tell you that it is a very strenuous and frustrating and exhausting time, but what makes it worthwhile is actually helping someone who needs and appreciates our help. It’s literally why we do what we do.
The navigator concept is a very bad one in the first place. Max Baucus was one of the primary architects of the Affordable Care Act. Here is a video of his questioning Secretary Kathleen Sibelius about navigators:
https://www.youtube.com/watch?v=K9UJv2wPtpc (navigators are a trainwreck)
https://www.youtube.com/watch?v=tvsPhvmELr0 (no criminal background check)
If someone wants to help people understand options, and help people with health insurance, they should take the necessary steps to become a professional health insurance broker.
It was a crazy busy eight days on Capitol Hill as we met with Senators, Congressmen, attended black tie events, sat in Congress and more. My favorite experience happened when I called on the office of Senator Angus King, a Maine Independent. I asked who the Health Policy contact in the office was. I was told “Marge handles that. Let me see if she’s here.” Then a few minutes later Senior Policy Advisor Marge Kilkelly walked out. I introduced myself and asked if I could schedule less than 10 minues minutes of her time at some point in the next 7 days. She asked me, “Well how about right now?”
She was warm, relaxed, educated about the various problems of health care in America in general and the challenges of the Affordable Care Act in particular. After about 5 minutes of meeting with her, I indicated that I knew she was crazy busy and that I promised to only take 5 minutes which had already elapsed. She responded “This is critically important and I have lots of questions. Do you have the time to talk now?”
Marge and I ended up talking for about 45 minutes. My favorite part of the meeting was when she responded enthusiastically to one of my ideas about requiring pharmaceutical manufacturers to disclose the average annual cost of the medication per person when they run their incessant television ads exhorting the public to “ask your doctor about Enbrel!” She loved that idea and took copious notes about it.
I cannot claim to have all the answers to fixing healthcare in America as it is a very complex topic with tons and tons of moving parts. But as a professional health insurance broker, I am uniquely positioned to suggest ideas as I am literally on the frontlines of this very important industry. I’ve seen firsthand what works about the Affordable Care Act, and what doesn’t and why.
This won’t be my last visit to Washington D.C.. I love the city, the sense of history, and the opportunity to engage Senators in dialogue about the future of my industry. We should all want to fix healthcare and health insurance in this country. Our current system is broken and will not survive without major repairs. HAFA believes that health insurance brokers should have a seat at the table when these changes are being discussed and if I can benefit HAFA and my consumers by being a part of those discussions, I fully intend to do so.