Who can protect us from the government?
Fringe Benefit Group
Now that the election is over and President Obama's team is transitioning into place, many questions remain about what will actually happen in Washington, D.C. throughout the next four years. Will the new regime come in and fix the private health insurance market and change the way we do business -- overnight? Or will the new administration address the nation's looming economic problems first? Whatever happens, there will most definitely be a period of transition and a lot of debate and negotiation over the ultimate solution for our nation's health care woes. As health insurance industry professionals, we will all have to make some changes in the way we do business and adapt to the times.
The new administration's desire to "solve the health insurance crisis" might raise a number of concerns for someone who makes who a living selling health insurance products. Will President Obama's team come in and change the way we conduct business, or will they merely make minor changes to the system with less focus on products and more on ways to pay for coverage? For me, one thing that comes to mind is how the federal government will coordinate on the local level with the states. For the most part, the Departments of Insurance in each state are responsible for regulating insurance, and each state is its own entity with regard to determining what is allowed. There are federal laws, like ERISA, which regulates some plans, but in most instances the separate states are responsible.
There is potential to coordinate health insurance regulations on a national level. Fewer state-specific rules and one set of national rules might make some areas of health insurance delivery more efficient and lead to cost savings and more affordable health coverage. I do not foresee a huge problem with simplifying and streamlining health insurance laws on a national level from a broker's standpoint, but I do see a huge problem on the horizon with making the transition to that type of system.
Simply put, the states are not going to want to give up control. The McCarran-Ferguson Act of 1945 gives states the right to regulate insurance and I do not believe they will give up that right without a fight. The federal government will not necessarily do a better job than the states, but keep in mind that the states aren't exactly doing a great job, either. Recently, the Department of Insurance for the State of New Hampshire took the uncommon position of declaring extra-territorial regulation over all limited medical policies covering members in their state. This means that employees covered in New Hampshire under a limited medical policy written out of another state can no longer be covered. The industry standard has always been to write a policy from an approved state and you can cover members anywhere -- provided the policy is approved in the domiciled state. New Hampshire is now saying that is not the case.
At the end of the day, what is the state of New Hampshire's goal? What are they hoping to accomplish? In a recent newspaper article, restaurant employees who were losing their coverage were upset because they were losing their affordable group benefit plan. The state was perceived in a negative light and the carrier was made out to be in violation of laws they didn't know existed.
Insurance industry regulation is necessary to ensure that consumers are protected and that insurance companies play fair. But who wins in the situation when a product is banished and members lose much-needed coverage? The free marketplace should determine what products exist and the government's role should be to monitor things, not dictate what types of coverage should be allowed to be offered. The only thing the State of New Hampshire is accomplishing is increasing the number of uninsureds in their state and taking on more costs for taxpayers to bear.
As we look for innovative and cost-effective ways to cover more Americans, this is a classic example of the government getting in the way instead of truly helping its constituents. Consumers need to be protected and sometimes, it is their government from whom they need protection. It's certainly not from the insurance companies trying to provide a decent benefit at an affordable cost.
We can all agree that some coverage is better than none. Limited medical plans were never intended to replace major medical insurance coverage. Their intent and design is to offer benefits to people without any coverage at all -- people who aren't offered coverage by their employer or who simply cannot afford a major medical plan. Eliminating these plans and forcing working Americans to go without coverage sets a bad precedent -- it's unfortunate that the state of New Hampshire is looking backwards, not forwards, with regard to the welfare of its residents.
Many changes lie ahead in the coming months. And, as a health insurance sales professional, my hope is that the new administration looks at the issues from all angles and seeks the input of those currently involved in the health insurance industry. I think we all agree that making coverage more affordable and easier for all Americans to access is a wonderful idea. But, I think the government must also take a step back and review the legislation that has made it harder for us to achieve our goal. In its efforts to protect us and make insurance more accessible, the government has, unfortunately, only made it harder to achieve this goal. By working with the health insurance brokers, carriers and others, I hope we can achieve our goals by working together and not by the government intervening and trying to mandate change.
*For further information, or to contact this author, please leave a comment and your e-mail address in the forum below.