Even though health care reform was passed a month ago, the insurance industry still seems to be unsure about what the future holds for reform, individual health insurance, and the role of agents. The Agent’s Sales Journal recently spoke with Richard L. Lungen, president of National Health Options – a membership-based, health care assistance program designed to offer a comprehensive, retail solution offering multiple options for accessing high quality, affordable health care products and services – about the future of health insurance, and his organization’s role in it.
How did you get started in the health care industry?
Twenty years ago, I began as a life and health agent working on small groups and individuals in need of health insurance and other benefits, providing me with a foundation to truly understand consumer behaviors in seeking, buying, and using health insurance. This was critical to my future because I was working with some of the largest insurance carriers, employers, and TPAs in the country. To this day, I continue to draw from my time working face-to-face with small business owners. As we operate National Health Options (NHO), that experience becomes more important as our customer base encompasses those same types of buyers.
What is National Health Options? What kind of service does it provide clients?
National Health Options (NHO) is a platform of discount and insured medical products and services that was created by health care and human resource executives to provide groups, associations, brokers, employers, and individuals with one-stop access to programs ranging from a free national prescription discount card up to an insured short-term medical program. The NHO platform also includes three different discount medical products and four different guaranteed-issue limited liability products. Excluding the short-term medical, there are eight different products with costs ranging from free up to $600+ per month for family coverage.
What do you like most about working in the health care industry?
Health care is something that is needed by all individuals, but most individuals do not fully understand their benefit programs or options. The best part about being in this industry is being able to help employers, individuals, and other groups design and implement benefit programs that provide members with coverage options that are creative and cost-effective.
How do you think the health care and health insurance industries will change with the passage of the PPACA – the health care reform bill?
The recent reform bill is likely better titled a health care coverage bill or even health insurance reform. Many of the true cost and trend drivers in healthcare are not addressed in the bill. Many experts agree that the biggest losers in the bill are taxpayers – individual and corporate – and agents. The cost and medical-loss ratio requirements being imposed on carriers, along with the onset of local exchanges, will dramatically affect how agents are able to create business and revenue for their companies.
Exchanges are likely to be local with multiple exchanges in each state as well as a few national connector exchanges. This will create a new paradigm for agents trying to identify new opportunities and maintain existing clients. Agents must offer their groups creative, cost-effective, and alternative options to meet the needs of employers and groups in the post-healthcare reform world.
Do you think the health care reform bill, as passed, will have a positive or negative impact on consumers?
Consumers will be impacted in different ways, based upon the individual’s current ability to access healthcare coverage.
Negative impact: Those with a rich benefit, fully employer-sponsored program may be changed to a more limited program. Healthy consumers will see higher costs for coverage as they subsidize the costs for the more chronically ill or aging populations.
Positive impact: Those with limited or no access to health care coverage will likely gain access to multiple program options through local and national exchanges. Those with chronic medical conditions will now have access to coverage through guaranteed issue programs.
What about health insurance agents? Do you think the bill will affect them positively or negatively?
As much as we’d like to suggest otherwise, we believe the impact on agents will be negative due to carriers cutting costs and the onset of exchanges. Agents must offer a variety of products and services that are creative and can be customized to fit group needs. There will still be a need for consultative services for groups and individuals to understand their benefit options, but margins and opportunities will likely be reduced post-health care reform. The agents that survive and thrive will be those that recognize the need for change and providing additional options for their client base.