Wednesday, December 17, 2014

Health Care Agents: Not Forgotten, Not Gone

Interview with David Racer, President and Founder of DGR Communications, St. Paul, Minnesota

Dave Racer is an old friend of mine from days gone by when he helped me produce the Reece Report, a newsletter that addressed physician and managed care issues. In recent years, besides writing, editing, and publishing 10 health related health care books, he has served as a friend, representative, facilitator and conciliator for health care agents, who form the bridge between patients, businesses, and health plans. He admires health agents, and they trust him to represent the valuable services they bring to the health system

1. What is your relationship with insurance agents?

I support licensed health insurance agents through research and writing, and providing ongoing education about their profession.

They view me as a resource to find answers to healthcare reform issues, and here in Minnesota, to resolve problems with MNsure , the Minnesota health exchange (I’ve developed a good working relationship with the MNsure CEO that often cuts through bureaucratic roadblocks and triggers quick action).

The many (ten so far) healthcare-related books I’ve authored, co-authored, edited, and/or published, have helped me bring a broader understanding of reform trends to agents.

2. What do you do for health agents?

During the past two years, I’ve conducted four major surveys of agents that have translated into communicating their concerns to lawmakers and to MNsure. The survey results have also generated goodwill to promote the role of agents.

Although I am not a licensed insurance agent, I am a member of the National Association of Health Underwriters (NAHU) and serve as the Minnesota Legislative Committee Resource Director. I’ve spoken at NAHU events in more than 25 states as a keynoter and providing continuing education.

3. What is the role of health insurance agents in the American health system?

Agents are problem-solvers who provide counsel to individuals and employers seeking ways to mitigate the cost of medical care. While some are captive – able only to write coverage for a single company – many agents represent several insurance carriers. This means they are able to help a client make an informed choice about which health insurance best meets their needs, and budgets.

Agents earn commission from sales, and only get paid when they sell an insurance policy. Their compensation comes from the insurance company, not the individual. Insurance companies do not discount the premium if a person chooses to forgo working with an agent.

One of the greatest and most important benefits agents bring to the table is contributing to the formulation of public policy. What distinguishes agents is the same characteristic that distinguishes practicing physicians from others – they do their work in the context of reality, not theory. They are experts at judging human behavior and response to positive and negative incentives, and how individuals take advantage of the medical system. Lawmakers are wise to listen to agents’ counsel.

4. How do health insurance agents regard ObamaCare? Positively, negatively, or neutral.

Agents are ferociously independent people . Their opinions about ObamaCare vary widely.

A large faction understand that as it concerns individuals and employers who are already engaged in the commercial insurance marketplace, ObamaCare has fouled the waters – unnecessarily inflating insurance premiums. They see a chaotic marketplace driven by politics, not economics or even common sense.

Generally, agents seem to adapting to the new marketplace. Some look at it as an opportunity – mandated coverage and guarantee issue insurance having created a new revenue stream. Others are fighting for survival, and reluctantly play in the new market. But a good number are creating new models, like my friends at – a private insurance exchange that actually works.

5. I have the impression that agents feel neglected, even ignored, in the discussions surrounding the health exchanges. I also have the feeling that most agents believe the so-called health care navigators are not qualified to advise health plan prospects or small businesses about selecting the proper plan? Am I correct?

Think about it: Agents are insurance exchanges. They represent several companies and help clients find best value. Government insurance exchanges are competitors, not partners. Even though agent associations may say otherwise, government policymakers eschewed any real input from agents, instead paying lip service to their wise advice.

In my most recent survey of Certified MNsure agents, 56 percent said they would do all they could to keep clients away from MNsure, while an additional 26 percent said they would not re-certify. It’s turned out that fewer than 540 Minnesota agents are MNsure certified, compared with about 2,200 last January.

Agents are not opposed to working with navigators when it comes to helping low-income people find options. If ObamaCare worked correctly, navigators and agents would hand off clients to each other – working together to enroll people in appropriate plans.

But agents absolutely are opposed to unlicensed, inexperienced navigators making any recommendations to clients about commercial insurance. This is especially true in the far-more complex world of small business insurance.

6.I have read that most businesses rely on health agents before making changes in coverage for employees. Indeed, I have heard many business owners trust their health agents more than their wives.

As MNsure moved toward its launch, it spent millions on market research. Much to MNsure’s surprise – and dismay – 86 percent of Minnesota’s employers said they would not make a decision about health insurance without consulting their agent. And a similar number said they trusted their agent more than their spouses.

7. Many of the health agents in Minnesota and elsewhere are big promoters of health savings accounts, not only because they lower premiums but because workers like the ability to make their own choices and to set aside money for retirement. Do I have that right?

Minnesota has the highest rate of individuals enrolled in HSAs in the nation. Agents gave HSAs a quick and positive welcome from the start for at least two reasons:

1) They saw it as a way to save employers and employees a good deal of money by putting them in control of their healthcare purchases.

2) HSAs, combined with high deductible health plans (HDHPs), mitigated the ever-increasing premiums of HMO and PPO plans. Overall, agents embraced the idea of healthcare consumerism, placing individuals in charge of more of their healthcare decisions.

Minnesotans, however, had an advantage in that the differential between HDHP premiums and those of HMO/PPO plans was 20-60 percent or more. This reduced cost make it more possible for employers to subsidize HSAs. That premium gap has shrunk over the years, unfortunately.

8. What has been the experience in Minnesota with MNSure, a state run health exchange? Is it true that the best-selling health plan at MNsure recently had to dramatically raise premiums because they were going broke?

PreferredOne, an insurance carrier owned by three huge provider systems, sold more than 60 percent of MNsure health plans during the 2014 enrollment period. Politicians trumpeted their low premiums, “the lowest in the nation.”

Turns out, PreferredOne’s rates were far too low, and their loss ratio far too great. They dropped off MNsure for 2015, and then announced premium increases averaging 63 percent. Agents certainly hope that PreferredOne can weather this storm, but blame Minnesota’s regulators for pressuring the company to reduce its 2014 rates to dangerously cheap levels.

9. How popular is ObamaCare in Minnesota, a bastion of Democrat liberalism? What is the percent of the uninsured in Minnesota, which prides itself on its progressive politics? Is the legislature Republican or Democratic? Do you see changes in the offing?

Minnesotans elected a GOP House majority during the 2014 election. They also sent all five Democratic incumbents back to Congress, and reelected Democratic Gov. Mark Dayton and other Democrats in statewide races. Oh, they also sent Sen. Al Franken back to Congress, and he was the 60th vote that allowed ObamaCare to move forward.

As much as I wish it, I’m not sure ObamaCare played much of a role in the 2014 election in Minnesota.

Our uninsured rate had hovered around nine percent for the past several years, and before that, settled in around seven percent. But the most critical factor in this is that 60 percent of the previously uninsured already qualified for government health plans (Medicaid or MinnesotaCare) but didn’t sign up.

By the summer of 2014, MNsure boasted that “they” had reduced our uninsured rate to less than five percent. Nearly 96 percent are now covered by a health plan. Considering that 86 percent of MNsure’s enrollees were now in Medicaid or MinnesotaCare plans, we can make this conclusion: After spending $155 million in tax dollars, we finally figured out how to convince low-income people to sign up – send out an army of navigators to convince them to do so.

10. How is Minnesota different from Wisconsin, the adjoining state, which seems to have embraced the policies of Governor Scott Walker by making him the winner in three recent elections?

We had a popular two-term GOP governor in Tim Pawlenty. But Pawlenty walked a safe and fine line, careful not to disrupt Minnesotans too much. In many ways, Pawlenty slowed down Minnesota’s persistent march toward socialism, but we stayed committed to an activist government.

Walker, by contrast, took aggressive action to change Wisconsin’s direction in so many ways. We feel warm toward Pawlenty, but Walker has heated up our passion and hope that even progressive states can grow up and make mature changes.

11. What is the self-image of health care agents? How do they see their future? What changes do they advocate in the health system?

Imagine walking into an employer meeting to announce that this year’s premium increase is “only 37 percent.” Agents have delivered that kind of news for many years. For 2015, in some parts of the state, agents have had to deliver group insurance premium increases greater than 100 percent.

It’s humbling to deliver news of premium increases, but incredibly fulfilling to find solutions for employers that at least mitigate some of the worst.

So agents have often felt a bit like the cousin who shows up for a family event to which he’s not been invited. Loved? Sort of. Appreciate? Marginally.

Agents have nothing to apologize for, and in fact, need to hold their heads high for finding some point of refuge for clients. I remind them that they deliver more than $900 billion a year in payments for medical care to Americans. Without agents and the private insurance industry they represent, America would have nowhere near the high quality care we used to enjoy – before ObamaCare began dissembling it.
Agents generally see the private marketplace as the right way to resolve our medical cost problem; they prefer state solutions to federal solutions; consumerism to communism.

They want to be listened to, and ought to be. No other profession understands human behavior toward healthcare and spending like agents, save physicians. Hey, why not urge them to talk with each other to find solutions that work.

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