Filed Under:Agent Broker, Coverage Issues

Healthcare Back in the Ring

Supporters and opponents of Obamacare might go one more round

It has been 3 years since Congress passed the law that has become known as Obamacare. Implementation of the Patient Protection and Affordable Care Act (ACA) has been underway since the ink dried on the bill.

But if anyone thought that Congress passing, and then the U.S. Supreme Court sustaining, ACA meant that the fight over it had at last been settled, they would be mistaken. In the hyper-partisan political landscape that has prevailed in the U.S. for at least the last two decades, big issues may settle down for a time but they don’t remain settled for long.

Most of ACA’s provisions don’t kick in until 2014. The public’s experiences with the law will be grist for off-year Congressional election campaigns. It would be comforting to believe that because the major challenges to the new healthcare law have been adjudicated, everyone would just get about the task of making the best of the situation. That may be hoping for too much.

Related: Read "Major Misfire"

Healthcare is among a small group of issues that stir intense passions from both ends of the political spectrum. ACA ranks right up there on the passion index with gun control and abortion, with one big difference: everyone will feel some impact from healthcare reform, while there are millions of people who will never own a gun or have an abortion. But everyone has opinions and everyone can vote.

Most people are in the middle on most issues, but advocacy on issues of passion comes from activists on both the left and the right. And the money to fuel the activists, whose motives are usually ideologically pure, often comes from those with a vested monetary interest in the outcome and thus are anything but pure in their motivation.

Another Healthcare Battle

If you want a preview of what could become one of the major issues of Campaign 2014, spend some time reading the latest news regarding ACA. Implementation of ACA could either go reasonably well, or be an unmitigated disaster. One thing is certain: Those who still dream of repealing ACA—despite being repudiated by the voters and the Supreme Court—will no doubt try to foster the impression that it has been the disaster they predicted.

Related: Read "From e-Cards to Cats"

How could ACA go wrong? Here are four ways:

  • Rate Shock: When state insurance commissioners arrived in Houston April 4 for the spring meeting of the National Assn. of Insurance Commissioners (NAIC), they received a paper drafted by an NAIC panel entitled “Rate Increase Mitigation Strategies.”

Commissioners are concerned that many consumers will experience “rate shock” when major provisions of the ACA go into effect in January 2014. This is a problem, because ACA has been sold, at least in part, as a way to make healthcare more affordable.

The paper indicates that state officials have serious concerns about ­possible rate increases, despite assurances from federal officials. It then laid out some options to mitigate rate increases, including regulating premiums more tightly; forcing insurers to cut costs or operate at a loss; financial assistance to consumers, above the subsidies that will already be provided; and programs to ensure that the costs of the sickest patients are shared by all insurers.

If forcing insurers to operate at a loss is being raised as a serious option, it indicates that something is very wrong here.

  • Where Do You Get Those Navigators?”: In March, a controversy erupted regarding plans to check the backgrounds of some 20,000 unlicensed “assisters” set to be recruited in California to help consumers enroll in health insurance plans. Inexplicably, there were howls of protest about the background checks from some California consumer activists. California Insurance Commissioner Dave Jones said he was “just shocked that groups that represent the consumer interest summarily dismiss what I think is a very real probability of immense consumer fraud.”

All it would take is just one consumer being the victim of fraud, then going public on social media or in the press, to undermine public confidence.

PIA testified before the NAIC in April, saying people who work as navigators in health insurance exchanges should be subject to background checks and licensing, to protect consumers.

The list of individuals that can become navigators is lengthy, which leads to an increased concern that many navigators will have little to no experience with insurance. As both the states and federal government establish navigator parameters, there is a better option for consumers: agents and brokers.

Agents and brokers are licensed, regulated, experienced professionals that educate consumers on complex insurance products and enroll them in policies that best fit their personal needs. Agents and brokers have a deep familiarity with insurance markets and products; they service plans throughout the year, assist with renewals, and are held to strict compliance standards.

Related: Read "Ben Nelson to the Rescue"

Agents and brokers must meet continuing education requirements to maintain their licenses. In addition, they are required to maintain continuous professional liability insurance coverage in order to protect consumers.

Rather than recruiting inexperienced, unlicensed people, it would make sense to rely more on professional independent insurance agents and brokers to help people navigate the ACA.

At the same time, agents are still trying to ensure that they are compensated fairly. Fortunately, the Dept. of Health and Human Services (HHS) recognizes the value of agent and broker participation.

In a proposed rule issued on April 3, HHS it confirms that agents and brokers can act as navigators in a federally facilitated exchange, but not receive consideration directly or indirectly from an issuer. However, it notes that “agents and brokers who sell other lines of insurance would not be prohibited from receiving consideration from the sale of those other lines of insurance while serving as Navigators, provided they complied with the [new] disclosure requirement.”

  • Smoker’s Penalty: The dwindling number of smokers in America are shunted outside while they feed their addiction. It seems that the ACA also leaves smokers out in the cold. ACA allows states to impose up to a 50 percent surcharge for people who have used tobacco at least four times a week over the last 6 months. And any subsidy they receive cannot be used to pay the penalty.

Starting next year, federal law will limit insurers’ ability to charge higher premiums based on age; women cannot be charged more than men because they’re women; pre-existing conditions cannot be used to deny or price coverage. What group is left from which insurers can recover some costs? The one without any clout: smokers. Still, Rhode Island, Vermont, Massachusetts and the District of Columbia recently voted to bar insurance companies from charging higher premiums to smokers. More states may follow.

In the U.S., 43.8 million people—19 percent of the total population—smoke. A number of these will need to access health insurance through the ACA. If they are subject to a 50 percent penalty, what happens? Chances are they get priced out of coverage. How does this advance the goal of covering more people? Even the American Cancer Society opposes this. Says a spokesman, “This is the population that needs healthcare the most. We are antismoking for sure, but we are not antismoker.”

  • The Confusion Factor: Those of us in the insurance industry sometimes forget that people who don’t work in our industry regard insurance as something to avoid thinking about.

Three years after passage of the ACA and months before major provisions take effect, two-thirds of Americans say they have too little information to know how the law will affect them. A Kaiser Health Tracking poll found that overall, Americans’ awareness of key elements of the law has declined somewhat since passage when media attention was at its height. The survey also found that the public is not tuned into decisions states are making today about how to establish the insurance exchange marketplaces.

That kind of apathy is fertile ground for misinformation.

The survey discovered that 47 percent of those polled mistakenly believe illegal immigrants can receive subsidies to purchase health coverage, 40 percent incorrectly believe a government panel will be created to make end-of-life decisions for Medicare beneficiaries, and close to 60 percent were mistaken that health spending rose faster than usual in recent years, when, in reality, it has declined.

Electoral Politics

Rising rates, massive confusion and the potential for fraud. All this could combine to sour the public on the ACA going into next year’s mid-term elections. Mix in vested economic, electoral and ideological interests on both sides who could profit by fighting yet another battle and you have the makings of a political donnybrook.

Still, it might not happen. People are used to keeping their children on their healthcare plans until age 26. By the time the next election rolls around, they may well be accustomed to having their preexisting conditions covered and not getting cancelled just because they get sick. Convincing people that they should support taking away the basic fairness that they now enjoy will be a very tough sell.

No matter what happens, the ideological warriors on both sides will try to spin the implementation of Obamacare to their political advantage. Advocates will call it a success and opponents will proclaim it a failure.

Three years after the final vote for approval in Congress, the debate about healthcare reform is not over. It may continue for the foreseeable future.

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