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Planned Obsolescence

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One person’s reform is another person’s overturning of  the apple cart, and a very clear example of that is the sweeping health care legislation recently signed into law in Washington. It almost defies belief to think that the political battle to make this law possible pales before the amount of effort it will take to actually implement the changes mandated by the overhaul. Now, we’re just beginning to see the reality of health care reform, and just as the doctor always says before he sticks you with a needle,  ”This is going to pinch a little.”

That certainly is true of the nation’s health insurance agents, who are in a fight for life. In a recent column, Janet Trautwein, CEO of the National Association of Health Underwriters, opined that health agents are a valuable part of the health insurance transaction, and that their efforts should not be discounted. Trautwein raises a number of interesting points, including the level of service agents provide to their clients, the role agents play in keeping costs down, and she even nods at the ongoing medical loss ratio issue by offering that in many cases, health insurance is at the 85%/15% ratio already.

But underneath the commentary is the very real concern facing health agents that changes are underfoot that may seriously undercut their role in the future of health insurance itself. As part of the Patient Protection and Affordable Care Act (PPACA), the federal government is setting up health exchanges that, in an overly simple explanation, provide consumers with an online portal for finding the best coverage for their needs and for their financial situation. The health insurance industry hates the comparison, but imagine an Expedia or Travelocity for health insurance, and you get a very rudimentary idea of what is afoot. California is already on the verge of getting their exchange off the ground, which is a miracle when you consider the vastness and complexity of any statewide initiative there. But if California is ready to go, then there is little excuse for other states to lag, and if states that drag their feet take too much time, then Uncle Sam will be ready, willing and able to step in and do it for them. One way or another, exchanges are becoming reality. With that in mind, it’s no wonder health agents need to convince the public how much it really needs them. I know travel agents who have been virtually put out of work by online travel booking. Honestly, without legacy clients unwilling to trust their itineraries to William Shatner, the few travel agencies still in business would be gone by now.

The health insurance agents’ lobby had been hard at work in Washington to secure a place for itself, and it seems to be gathering enough support in terms of legislative mandates that require some kind of use for health agents in a post PPACA environment. But cost will have to be a factor. Realistically speaking, the U.S. economy is looking at a protracted recovery period, and the cost of healthcare is going to keep rising anyway. The American public will not sit still for very long if they know there is a cheaper option for their health care, but some Soviet-style bureaucracy is providing a place for agents that the market would not otherwise. Time will tell.


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