Maggie's Farm

Why the heck should anyone care about how health insurance agents will fare under ObamaCare?

Under the House bill, for example, the Small Business Administration will help businesses and individuals figure out how to obtain affordable coverage. (The bill provision is titled, “Assistance for Small Employers.”) Health insurance agents are not precluded from providing advice. But, the SBA will be allowed to bypass agents.

A health insurance agent is required to complete initial and regular formal training courses in the subject (including ethics), pass initial and periodic tests, and are screened by their state and by insurance companies for criminal or personal conduct (including declaring bankruptcy) that may negatively affect their reliability to be licensed to provide agent services. In addition, through professional associations, through insurer education programs, through self-study, and through competitive pressures, health agents stay current on the latest laws and offerings from various insurers. Furthermore, almost all health insurance agents are independent businesses or work for independent agencies, not beholden to the insurers but to their customers. Importantly, individuals, small and larger businesses have priorities more important and pressing than becoming experts in health insurance or its interactions with other laws or aspects of their primary concerns, and heavily depend upon qualified, trusted health insurance agents. Lastly, many health insurance agents have extensive credentials and experience. For example, I attained earned, tested, rigorous certifications – Chartered Financial Consultant (ChFC), Registered Employee Benefits Concultant (REBC), Registered Health Underwriter (RHU), Chartered Life Underwriter (CLU) – that, along with other experiences outside health insurance (I was a senior financial and business operations exec for Fortune 100 and small companies for 15-years before becoming a health insurance agent) and years of experience as a health insurance agent (I’ve been at it for two-decades). This delivers wide-ranging values to my clients and of the interactions of their health insurance with their broader business, regulatory and financial affairs.

Does anyone expect the staff hired or created by the SBA to have this independence, experience or training? If so, get real!

Surely, there are some health insurance agents who are lesser or incompetent, or who are crooked, or who steer some business toward favored insurers for added volume bonuses. However, the less competent exist in a highly competitive market, where they lose business to the more energetic and competent in delivering value to clients. The crooked or shady are winnowed out similarly plus by stiff regulations and prosecutions.

This is just another aspect of the losses that individuals and businesses will suffer under ObamaCare.

A leading expert and opponent of Obamacare, Grace-Marie Turner, writes in the New York Post:

The 1,990-page bill the House leadership unveiled Thursday would impose a dizzying barrage of new regulations on employers, and force them to either provide government-specified health insurance or pay a penalty of up to 8 percent of their payroll.

Even firms that now provide health benefits get slammed -- since that coverage may not meet the government's definition of "acceptable." …

The head of the National Federation of Independent Business, Dan Danner, said the reform bill's huge cost "will ultimately come out of small business owners' pockets and prohibit them from growing, investing in their business and hiring new employees." …

The pain continues: The bill would also subject businesses and employees to a bigger, hidden tax -- a shifting of costs from public to private payers.

The legislation would expand Medicaid -- the joint federal/state program designed to insure low-income Americans -- to cover another 15 million people. But Medicaid payments to doctors and hospitals are well below market rates -- and often below their costs of providing care.

A study by the independent actuarial firm Milliman Inc. concluded that families with employer-based health insurance already pay $1,788 a year in hidden taxes to compensate for underpayments by government programs. That figure will plainly grow under the House bill.

For a final blow, the bill imposes surcharges on high-income individuals that will certainly hit many small business owners -- who pay business taxes through their personal-income tax forms.

Also, read The Worst Bill Ever.

For disclosure, I’m nearing retirement, and have shrunk my successful business. I am not going to directly suffer as a health insurance agent or small businessman, although I will as a taxpayer and as someone who cares about quality health care for myself and others if ObamaCare passes.