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HEALTH CARE REFORM: A LETTER TO OUR MEMBERS
By: Ernie Sweat CEBS / President Elect UAHU 2009
For those of you who have not followed the many hearings held by the Health Care Task Force or who have not seen the proposed legislation that has been released, the content of this article might confuse or surprise you. This would be an excellent opportunity for you to get in “the know” so to speak. Regardless of your actions, you will certainly be brought up to speed soon enough assuming you make a living in some fashion relating to the sale of group or individual health insurance. The world we live in is about to change significantly. As an organization we need to do what we can to be a driving participant in this change, although certain members of the task force made it very clear that our opinions and expertise do not hold a great deal of water. Fortunately, there are many representatives serving Utah’s population who likely are interested in hearing what we have to say. That is our hope at least before we as a state make some of the same mistakes that others have made in the name of reforming health care. Every member will be called upon to assist in getting our message to the masses.
There are some main aspects of the legislation that as a group, the executive board would like to comment on. The first issue that we will be seeing is the creation of an internet portal used to purchase health insurance, both individual and group. HB133 required the creation of an informational portal, yet what we are seeing for 2009 is quite different. For the record, the Utah Association of Health Underwriters does not oppose this more “robust” portal so long as it adds itself as an option to an already competitive market for health insurance. This must be voluntary for the carriers to participate. Charging a fee to those not participating does NOT make it voluntary.
We support the idea of Net Care and see it as a viable and much needed product for Utah citizens being displaced from their jobs. We do not believe however that this new product should be relegated to sales only through the web portal. We also support the idea of portability and as an organization have long championed efforts to make an easier conversion from a group plan to an individual plan, however we do not support the notion that using a community rating model, individual mandates and guarantee issue for individuals is the method to be used to accomplish this. Community rating has been proven to increase rates, which we vehemently oppose, and mandates are difficult to enforce as well as put a burden on our already struggling small business community.
Utah currently ranks 51 out of 51(including D.C.) in per capita health insurance cost nationwide. We have managed to be where we are and still be a guarantee issue state through a number of avenues that work very well here. We have strict underwriting guidelines, a large pool of younger individuals and an uninsured risk pool to take on those individuals with too many health issues to qualify for a private policy. As health underwriters, we support the issuance of as many private policies as possible. However, we also live in the real world and know that making policies guarantee issue and essentially marginalizing the uninsured risk pool will cause rates to skyrocket. This could affect some of our insurers who may elect to no longer offer policies due to the uncertainty of risk and also that large group of younger individuals who tend to be very price sensitive. How many would this new arrangement price out of the market?
Lastly, there is a great deal of language in the proposed legislation relating to transparency of producer commissions. We have said this during testimony to the task force and will say it loudly again in this forum, the Utah Association of Health Underwriters has no problem with disclosure of our compensation. We feel that transparency is a must in getting our arms around health costs…the real driver of health insurance inflation. That being said, we feel that the legislation misses the mark in singling out health producers as a group. There is no reference to hospital administration or any other overhead expense leading to the total sum of claims. As a whole, the amount paid to health producers is a fairly small piece of the pie.
Many overtures were made by members of the task force that this is the time for serious health reform. As an organization, we do not disagree in the least. Serious health reform, however, is going to take a serious attempt to reduce health claims. Otherwise, our goals of reducing the uninsured via unfunded issuance mandates will simply lead to higher rates. Our research shows that each percentage increase in costs causes many thousands more to drop coverage. If we focus too heavily on purchasing mechanisms and too lightly on cost inhibitors, Utah’s version of health care reform will be a monumental failure.
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