Obamacare is paving the way for demise of the health insurance broker

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IFA Web News reports:

“An article in the Thanksgiving edition of the Atlanta Journal-Constitution shows the myriad inconsistencies and irrationalities of the new health insurance overhaul law — dubbed “health care reform” — and spells out how the federal government is paving the way for the demise of the health insurance broker.

Some incredible excerpts taken directly from the story, and my highly insightful comments:

“The process of creating this new way to shop for health insurance will be costly and enormously complicated.” — Duh, they want to reinvent the wheel…of course it’s going to be expensive and cumbersome! Imagine, if you will, the federal government requiring the states to come up with a plan to create a new distribution system for consumers to buy food products, even though we already have  a system called “the grocery store.” A daunting task? You bet! And frankly, not necessary.

“States that take on the task of running an exchange will have a significant amount of discretion that will determine the level of competition, the amount of choices for consumers and ultimately whether market forces work to help control insurance costs, as the law intends.” — So, the Obama Administration and Congress believe that the states should control competition among privately owned businesses, and also allow them to determine whether or not to allow the market to control costs. Yeah, show me any state or federal agency that allows the American public to determine how much taxes are taken and what is spent by the government, and I will show you a pit bull that prefers bon bons over raw meat. The states will determine whether or not the market should dictate costs? Which way do you think they will go with that…set the costs themselves, or allow the market to do it?

“Anybody who shops on the Web today for products where they can go up there and put in preferences and pull up a set of choices that are relevant to those preferences, for a hotel or an airline or whatever, that is the vision of the exchange for health care,” said Joel Ario, director of the Office of Health Insurance Exchanges at the U.S. Department of Health and Human Services. — OK, if that isn’t seen as an overt indication that the Obama Administration and its operatives consider the broker to be completely irrelevant in the health insurance distribution process, then I don’t know what does. It is reminiscent of earlier this year, when a staff blogger at USA Today wrote that the health exchange system originally proposed by the House would imitate Travelocity, since the fed would control the entire thing, which the Senate version (closer to what we now have) would allow the states to manage it. It appears, however, that Mr. Ario, a onetime Pennsylvania insurance commissioner who worked directly with carriers and brokers, has swallowed the Kool-Aid and seems to think that providing health care coverage is as easy as reserving a room at Motel 6.

“Most employees of large companies should expect to continue to get their coverage at work, experts said. But some small and medium-size employers could end up dropping their coverage and shifting their workers to the exchange. How many companies might do that is a big unknown.” — speaking as an experienced journalist who seeks to back up blanket statements with facts, I have to say that this is one of the most irresponsible and egregious acts of unprofessional journalism I have seen in recent memory, and also one of the biggest misconceptions if not outright lies proffered by those in favor of state-run health insurance. What facts does the writer use to back up her assertion that “most employees of large companies” will continue with employer-sponsored coverage? Did she quote any employers, to at least show anecdotally that employers will keep employees covered? Or is she relying simply on unnamed “experts,” whose affiliations are conveniently omitted from the story? And “some” small and mid-size companies could put workers on the exchange? Is this again from the “experts?” Or is this complete conjecture? It appears to be. At least the writer is being upfront when she states that it is a “big unknown,” but making such concrete statements such as “most” and “some” and then admitting that it is really unknown, is poor form. In reality, we might see a majority of American workers form both large and small firms pushed onto the exchanges, where they will not only have to find their own insurance (required by law), but pay for it out of their own pockets, at rates that will likely be higher than what the employer was paying in the first place. Nice.

“The way the law is written, some employers will be penalized for failing to offer coverage. But paying the penalty might be more cost-effective than providing the coverage.” — Strike the word “might” and replace it with “will,” and this statement will be accurate. Employers will drop coverage and the employees will be forced to go onto the exchange. And brokers are out of that mix entirely.

Georgia’s governor, governor-elect and attorney general are all against the federal law and trying to thwart it, but are working within the law to ensure that at the state level, at least, it matches to the best of their ability a free market exchange.

Without getting into a big Constitutional question (which, actually, is at the heart of the lawsuits instituted by the states against the law), it is incredible that the top elected officials of our country would enact legislation to force states to do something that they neither want to do nor have the resources to do, and take what some say is a disjointed system of state-based insurance regulation, and turn it into a black hole of regulation and uncertainties that could prove disastrous.

Right now, the broker community is the navigator holding the compass and telescope on the ship, “USS Purchasing Health Insurance.” The federal government has decided that it can do a better job for the crew and passengers, and is putting the broker on a life raft and pushing it out to sea, while telling the passengers that the ride will now be smoother and easier.

The only thing that is missing is Gilligan and the Skipper.”

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