Why Agents Must Remain Involved in Healthcare Debate

Imagine for a moment a law passed by Congress declaring that physicians are prohibited from performing surgery. Instead of going to a doctor for an operation, you would be required to have your surgery performed by community volunteers who might be plumbers, hair stylists or butchers.

This analogy is not as preposterous as it sounds. At the beginning of the current debate on healthcare reform in Congress, one proposal to sell insurance through health insurance exchanges would have barred the participation of all licensed insurance agents. Instead, unlicensed individuals or community groups with no expertise in health insurance would be empowered as “navigators,” helping people choose which health plan they participate in.

Suddenly, being certified and licensed would be considered a disqualifying factor. Agents and brokers would have been banned from the process, in favor of individuals who could demonstrate a lack of professional insurance expertise and who would, in effect, be appointed as de facto health insurance agents by the federal government.

The good news is that as a result of the involvement of thousands of agents across the country, common sense is gaining ground on this particular aspect of healthcare reform.

In the House, a former independent insurance agent and PIA member, Rep. Charlie Melancon (D-La.), joined with a group of his fellow conservative Blue Dog Democrats to successfully offer an amendment stating that agents and brokers can sell insurance products offered through the proposed exchanges. Similar legislative language is included in the healthcare reform bill approved by the Senate Finance Committee.

Recently, a researcher at the University of Iowa made an interesting observation: health insurance differs in many ways from other types of insurance. Insurance manages risks that are unknown, such as a house fire or an automobile accident, by transferring them to an insurance company in exchange for a premium. The insurer, in turn, manages the risk by pooling together a large number of risks.

But with health insurance, insurers are expected (and in many cases required by law) to cover things that are known and predictable. Perhaps that’s why health coverage is sometimes referred to as a health “plan,” not “health insurance.”

It’s an interesting observation, and completely beside the point. As a society, we have already decided what should be covered: almost everything. What’s being decided now in Congress is who should be covered, what it will cost, and who should pay for it.

The American healthcare system is currently a hybrid system with many components, some of which function well while others do not. It is also not a purely private system, it is majority-private. Medicare, Medicaid, the Veterans Administration system, the federal Children’s Health Insurance Program and various state systems are already “public options.” It is a political reality that this will not change.

Those of us who are not disadvantaged children, the elderly, veterans or poor are already funding health care for people who need care, through taxes. At the same time, we pay for care for ourselves and our families. And if we own businesses, we also try to provide some kind of access to coverage for our employees. Owners of small businesses are paying their share, and then some.

One of the biggest costs of the current system is the cost to our free enterprise system. America’s ability to compete in the world is negatively affected by the cost of health care. Owners of small businesses, particularly, have trouble attracting talented employees if they cannot afford to offer health coverage. Employees, in turn, can be reluctant to change jobs or start businesses of their own, for fear of becoming uninsured.

It is critical that Congress get healthcare reform right. That’s why professional insurance agents must remain fully engaged in the legislative process and not be relegated to the sidelines by reflexive opposition to the entire concept of reform.

Our healthcare system needs improvement – it costs too much for the quality it delivers, too many people cannot afford coverage, if they can find it, and they can lose it for getting sick.

Congress will probably pass something that will be called healthcare reform. The challenge is to build on the private system in a way that doesn’t bankrupt Main Street, USA. It is up to us to continue to lead the way for lawmakers.