Obamacare: An Insurance Agent's Perspective . . . if anyone in D.C. cares
by Norman Adams on August 3, 2009 at 9:45 AM
Not that anyone really cares what a lowly insurance agent thinks about the President’s plan to fundamentally reform one of the single largest industries in the United States, one that provides nearly 14 million jobs for Americans, but here it goes.
Allow me to state my vested interest up front.I sell health insurance to groups and individuals. Health insurance is not the sole source of revenue for my insurance agency, indeed it accounts for about 10% of the agency’s annual revenue.But, 10% is not chump change either.Given what is happening in Washington, D.C., I guess I'm glad it is only 10%.
Does this mean I am biased? Maybe. But, please let my arguments stand or fall on their own merits. I like to think, that after decades in the business, I actually know something about health insurance. How many of the politicians holding our collective fates in their hands know much about health insurance?
I'm not going to waste time telling you how great our health insurance or health care system is. It is far from perfect. There is much within it that could use improvement. Visit an emergency room lately? Ever get “balance billed” by a provider for “out of network” charges you did not approve? If so, you know that ours is not a perfect system.
But, you don’t fix an overflowing toilet or even a cracked foundation in your home with gasoline and a match.
Make no mistake, Obamacare will torch our current system of health care and health insurance. This is no modest reform.
Contrary to President Obama’s repeated attempts to assure those of us pleased with our current health insurance arrangement that “you will keep your plan,” this is simply not the case.
President Obama’s plan will introduce a “public option” that will “compete” with private plans. This all sounds nice and market-based until you realize that the public option is going to be subsidized with your tax dollars. It will “compete” only in the sense that it will always be cheaper than what you can obtain on the private market. Because private health insurers are bound by the market constraints of profit-making, cost containment, supply and demand, etc. The federal government knows no such bounds.
A Heritage Foundation study released on July 17, 2009, has reported that the premiums under the public plan will run 20 to 25 percent less than the average private plan. Will the government turn a profit on this plan? They don’t care because the rules you and I operate under will not apply to them.
In my experience as an insurance agent, the number of customers (for group and individual insurance) who will not move their insurance for a 20 to 25% savings is zero. The fact that you personally like your plan will not matter, your employer (who is subject to the market rules of profit-making, cost containment, supply and demand, etc.) will make the decision for you. The study confirms this, estimating that coverage under private insurance will decline by 83.4 million people, or 48.4 percent.
How will what remains of the private insurance market be able to handle such a loss of premium dollars? Who knows? If these markets survive they will be in no position to offer premium savings. My guess is that it will be crippling for the private insurance market. To the extent it still exists five years after implementation, it will be a specialty market where only the very healthy and/or very wealthy need apply.
The Obamacare plan will not “save” money as the Administration claims. This is a pretty big whopper that the President keeps on telling. The latest Congressional Budget Office estimates put the price tag at over $1 Trillion even without the costs of the “public option” or all the Medicaid expansions the Democrats want.You cannot take 83.4 million people who were previously privately insured plus 32.6 million people who were not buying insurance before and SAVE money. You have to work inside the D.C. Beltway to miss that fundamental fact.
There is a limit to what we can, as taxpayers, afford to spend on health care, especially when you consider the crushing debt we are already incurring as a result of our entitlement spending, bank bailouts, auto bailouts, etc. With Obamacare, we will see those limits in the doctor’s office, the hospital room, or the ER. Choices will be circumscribed in the name of efficiency and cost control. To be sure, insurance carriers have been engaging in these sorts of cost controlling methods for years.
You probably know someone who became so upset with the charges that an insurance carrier was willing to pay for and not pay for, that they changed their insurance coverage. I know plenty of people like that. But, once the government that is making those decisions for you, where are you going to go?
So, taken all together, we have devastation of the private insurance market, a brand new government entitlement for 129.6 million people, and government oversight over patient/physician decisions about care.
Please America, do not do this!