Washington
A concern that a so-called "navigator" provision will limit the ability of insurance agents to sell health insurance products will be front and center on the agenda of the industry's lobbyists as the U.S. Senate begins debate Nov. 30 on its version of reform legislation.
While agent groups object to a number of other provisions in the bill–particularly one creating a government-run insurance plan, unless a state opts out–the navigator section strikes at the heart of independent agent participation in the health insurance marketplace.
This is a critical point, since a growing number of independent property and casualty insurance agencies are generating a large portion of their revenue through the sale of group benefits to employers–particularly group health insurance. Whether that would continue under the system the Senate bill envisions is a matter for debate.
The Senate bill would establish an exchange where individuals could shop for health coverage. The question is whether agents would be allowed to help people "navigate" that exchange, and if so, under what conditions.
"Unlike the health care bill passed by the House, the Senate bill weakens the position of agents and brokers," according to Mike Becker, director of federal affairs for the National Association of Professional Insurance Agents. "It invests in one federal bureaucrat–the secretary of the Department of Health and Human Services–the authority to decree how much agents and brokers could be paid for selling policies offered through state exchanges."
He said the Senate bill also leaves the door open to individual states to bar licensed agents and brokers from participating. "And it specifically allows for unlicensed individuals to serve as 'navigators' in competition with licensed agents and brokers," Mr. Becker said.
"As this bill is debated, it will be open to amendment on the Senate floor," Mr. Becker noted. "PIA will work to have this section of the bill amended to better protect the interests of agents and brokers."
One industry lawyer, who asked not to be identified, also cited as a "potential concern" the authority of the HHS secretary to issue "rate schedules for broker commissions paid by health benefits plans offered through an exchange," rather than permitting such commissions to be negotiated in the marketplace.
Meanwhile, the Senate bill's creation of a public insurance plan–even if states are given the right to opt out–has agent groups concerned.
The Independent Insurance Agents and Brokers of America said it opposes the "public option" because it believes a government carrier would unfairly compete with the private insurance marketplace.
IIABA officials pointed to the current government-run health insurance plans–Medicare and Medicaid–as evidence that Washington sets its own rules on payment for medical services, contending there is nothing fair or level about the playing field created.
In addition, "we do not believe any state legislature or governor will 'opt' to take away an entitlement bestowed upon their citizens by the federal government and federal taxpayers, especially since the citizens of that state cannot 'opt out' of paying for the public option," said IIABA President and Chief Executive Officer Robert Rusbuldt. Therefore, he argued, "the 'opt-out' is not a viable compromise…"
Additional objections were raised in a note to members by Joel Kopperud, director of government relations at the Council of Insurance Agents and Brokers.
While the bill put forth by Senate Majority Leader Harry Reid, D-Nev., offers some "marginal (and consequential) improvements over the House-passed legislation," he warned that "there are a multitude of issues that are troubling to us."
He noted that not only do broker access issues remain less than fully addressed, "but the legislation contains a number of provisions–based on insurance market reforms that are accompanied by weak and ineffectual individual and employer mandates–that we believe will ultimately constitute an open invitation for employers to drop plans."
Officials of the American Academy of Actuaries voiced the same concern, saying the individual coverage mandate provision in the Senate bill must be strengthened.
The Senate bill would phase in a relatively small penalty on those who do not buy coverage–starting at $95 in 2014 and topping off at $750 in 2016. The House bill is more stringent, with the uninsured paying 2.5 percent of their adjusted gross income, but with limitations and exceptions granted.
The actuaries said that an effective and enforceable mandate will minimize adverse selection stemming from more restrictive issue and rating rules prescribed by the bill, which prohibits insurers from denying coverage to people with preexisting conditions, or charging unreasonably more for their policy.
The industry's concern is that a low penalty for not buying coverage would encourage younger, healthier individuals to skip paying for insurance unless they become seriously ill.
Cori Uccello, the senior health fellow for the actuarial group, said the "viability of health care reform depends on attracting lower-risk individuals, and strengthening the individual mandate through higher financial penalties increases the likelihood that these individuals will purchase coverage."
As for the likelihood of health care reform's passage, in whatever form, CIAB lobbyists wrote to members that "it has always been our belief, based on the firm Democratic majority of 60 votes in the Senate, that the leadership will find a way to ultimately achieve passage of the legislation, notwithstanding the (courageous) opposition of a handful of Democratic senators to a 'public plan' option, and notwithstanding a massive public outcry and backlash."
The CIAB note added that "it is difficult, however, to envision at this time how this will play out, and more and more likely that the debate will spill into next year."
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