In my last article, I mentioned I would be sharing ideas on account rounding and cross-selling. However, this week I’m attending the Employee Benefits Leadership Forum put on by The Council of Insurance Agents and Brokers. For those of you who do not know, the Council represents leading insurance brokerage operations and provides a voice in Washington D.C. Clearly at the top of the agenda is what is going on legislatively and what will come out of Congress in the next 90 days with regards to how health care is delivered. Given the concern on this topic, I thought I would share the valuable insight of the speakers.

On May 27, the Council had Tom Daschle, one of the longest serving Senate Democratic leaders in history, and Michael Leavitt, who served as both Secretary of the EPA (2003-2005) and Secretary of Health and Human Services (2005 – 2009), address the group. Both speakers presented their views on what they think is going to happen, and then held a Q&A.

What everyone agrees on
Daschle stated that there were some issues that everyone in Congress could agree upon:

1. Access needs to be improved. The 50 million-plus under/not insured is unacceptable.
2. Quality needs to improve. The World Health Organization ranks the United States 37th, below Costa Rica.
3. Cost is out of control. Currently costs $8,000 for every person in the United States.

With regard to cost, Congress feels that the United States is doing things backwards. If you picture a triangle, the bottom would be represented by proactive measures, like wellness. The top or tip of the triangle would be very high-end costs, like transplants. Most countries spend at the bottom and move up until they run out of money. In the United States, we spend at the top and move down before we run out of money.  

In summary, what everyone can agree upon is that we want a high-performance health care system that has access for everyone, a low cost and high quality. (I hope they did not spend a lot of our tax dollars figuring that out!) The issues that Congress now faces are the following:

Issues facing Congress

1. The Economy. At this point, right now, will this help or actually be a deterrent to the current economy?
2. Start-up costs. Most of the initiatives have very heavy costs with no clear cut idea on how to fund them.
3. Ideological differences. Democrats and Republicans. Conservatives and Liberals. (As my dad used to say, there are two things you never want to see made….sausage and law.)
4. To what extent can strategic legislative action be created so that it is bi-partisan enough to pass

So where are we? Here are the areas that he felt Congress can loosely agree upon:

What Congress loosely agrees on

1. We will not go to a single payer system.
2. Create state pools to cover uninsured.
3. Cover everybody for both mental and physical.
4. Need to focus from wellness to illness (back to the triangle).
5. We need transparency. We lose the equivalent of a fully loaded 747 every day and a half to medical mistakes.This needs to be examined more.
6. Need to apply best practices.
7. Health information technology is critical and will be a big part of the proposal.
8. Chronic Care Management.
9. Payment reform. Focus on value, not volume.

Now that we know where they loosely agree, where is there absolutely no consensus?

What Congress cannot agree on

1. Offering a public option. (This is the Trojan Horse that I’ll get to in a minute.) This option means that if you do not like your current plan, you can jump onto the Federal plan.
2. Tax strategies on Employer sponsored plans.
3. Mandates for employees and employers.
4. How it will be managed (Federal Health Board).
5. How to address medical malpractice.
6. How to finance.

Daschle said that it will be a 50-50 chance whether anything will get passed this year. Leavitt concurred with Daschle. He feels the biggest issue is what exactly the government role should be. The consensus is that everyone should be covered, but how to go about it?

The Trojan Horse
Leavitt feels a critical lynchpin to this is the debate of the public plan. He cited a survey which stated that if employers could get out of offering health care, companies representing over 118 million Americans would do so. This is a big problem and not the right direction. By offering a public plan, employers would move to get out of health care and the private market would shrink, and ultimately there would be national health care. This is not the intent nor will it accomplish most of the objectives. He feels this is Trojan Horse. The people pushing this plan are disguising it for what ultimately it will become. Congress needs to be aware of the potential implications of this type of offering.

A big concern that Congress is also weighing is what if the world financial community would look at the United States and start to make the determination that we cannot pay them back? It should be noted one of the first things the current administration did was to go to China and convince them to keep investing in America. Taking on a big expense and obligation could severely impact the money markets and is forcing Congress to proceed with caution.

What can the Broker do?
There will be discussions over the next 90 days regarding intermediaries and how brokers get paid.  There was consensus from both Leavitt and Daschle that Congress does not understand the role of the broker and the value that is delivered. It is imperative that if you want your voice to be heard, you should be setting up meetings with your congressman to make sure they understand.

In summary
Finally, when pressed for what do they believe will most likely happen, Leavitt felt there were three most likely outcomes:

1. Big Bang Bill with some details (likely).
2. Big Bang Bill with no details (most likely).
3. Incremental Strategy – add more to Medicaid, work on quality, etc. (not likely)

He feels that a bill that outlines, at a very high level , what they would like to accomplish is likely. This can be rolled out with much fanfare (hence, the Big Bang). However, it will have very little detail. This way, Congress can spend more time legislatively hammering it out within committees. In addition, this will also allow them to delay the cost of the bill as they can defer implementation. 

At the end of the day, change is happening. Some brokers will fight it and will most likely lose. Others will accept it and survive. Others will lead and prosper into the next century.

I hope this summary helps you better understand what Congress is grappling with and how the winds are blowing. Howard Dean is up next. As I continue to pick up information, I will update you.