Pragmatism is clearly replacing anxiety and opposition as the health insurance industry pivots at a feverish pace to implement health care reform legislation.
While clearly disappointed that they were not able to shape the legislation to their advantage, the entire industry is mobilizing to adjust its activities to the reality that some of the provisions will quickly go into effect.
Agents are especially concerned about the new law.
An official with a Washington trade group who works closely with the National Association of Insurance Commissioners and who asked not to be named, said agents are concerned that the implementation of the Health Exchange system in 2014 will curtail their ability to serve the individual and small group markets.
“The concern is that the exchanges will exclude them,” the official said. “And the fear is that the perception that agents ‘only look out for themselves’ will grow down the road.”
Asked to comment, Gwyn Dilday, with CIGNA Public Relations in Glendale, Cal., said, “CIGNA believes that brokers bring expertise to individuals seeking insurance and can help people better select the best plan for their health insurance needs.”
“To the extent that regulations allow, we support the continued use of brokers,” Dilday said. “Currently, we use brokers to sell our individual products in the 10 states that we offer individual coverage,” she said.
One of the key products sold by agents that will be affected by the new law will be the Medicare Advantage program.
Under the reconciliation bill signed by President Obama on March 30, payments to Medicare Advantage plans in 2011 would be frozen at 2010 levels. Additional cuts to the program will be phased in beginning in 2012.
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, said “This version of the legislation will end Medicare Advantage as we know it.”
“All parts of Medicare-including Medicare Advantage-should be reviewed to find savings. But these cuts go way too far. Under this plan, millions of seniors will lose their current Medicare Advantage benefits and be forced to pay higher out-of-pocket costs,” Zirkelbach said.
“We’re in a major pivot from the politics of health reform to its implementation,” said Joel Kopperud, a director of government affairs at the Council of Insurance Agents and Brokers.
“The Council is aggressively giving our members the tools and resources they need to service both existing and new relationships,” Kopperud said. “The demand for clarity is huge.”
Tom Currey, president of the National Association of Insurance and Financial Advisors, added, “The insurance industry, in all its facets, is a remarkably creative and resilient industry.
“Once the dust settles, insurance companies will find ways to work in the new landscape and NAIFA stands ready to help our members thrive in the new world of health care delivery.”
Specifically, Jessica Waltman, senior vice president of government affairs for the National Association of Health Underwriters, said NAHU is holding several webinars to provide information to its members on the legislation, especially on the provisions that must be implemented promptly.
Waltman said “we get hundreds of questions” at these sessions.
She also said that in some cases, several agents are listening at one location, so, effectively, “thousands of agents are involved on these calls.”
Waltman made clear that NAHU is hopeful it can secure changes in the legislation to deal with provisions it fears will have a major impact on agents going forward, but that will require a whole different makeup in Congress after this November’s election.
However, noted Ira Loss, a Washington healthcare analyst for institutional investors at Washington Analysis, “that’s just not politically feasible.”
He added, “It’s futile. Opponents won’t have the votes, and they don’t have a president who will support major changes.”
Waltman acknowledged that. “While we will be seeking legislative changes to provisions that we would be hard to live with, there are some that go into effect immediately or almost immediately that we must deal with.”