IN THE NEWS: Will insurance brokers survive health reform?

By Stephanie Cohen
September 2, 2009
Disruptive Women in Health Care: www.disruptivewomen.net

As an insurance braoker in the metro Washington DC area, I have been in the trenches of selling, and advocating for our customers for their small group health insurance, disability programs and life insurance plans for over 17 years.

Needless to say, it has been maddening in the last five years to watch rates rise and our customers get increasingly frustrated with the system. I spend my days arguing with insurance companies about what they will cover and what they won’t — and I’m consistently amazed that these large firms often don’t have a handle on the benefits they provide in their policies. To say the right hand doesn’t know what the left is doing is a dramatic understatement.

I am one of the first to admit that something needs to be done. Last fall I hosted the DC Health Summit and brought together some of the country’s top health insurance executives, doctors, politicians, hospital administrators and business people into one room to discuss what might be done to fix the system.

An Obama spokesperson was one of our speakers — and today I continue to stand behind the president’s goal to accomplish health care reform, and do it as soon as possible.

As the debate has unfolded, however, it has been suggested that health insurance brokers be eliminated from the mix. Obviously, this potential threat is unnerving, but if you consider the possibility on a more global level — it simply doesn’t make sense.

Here’s why: If we have a government option in health care reform, over a short period of time, it will likely crowd out the private sector. If private health plans are squeezed out of the market, it follows that insurance agents will be as well, and that would be a major loss — not just for my firm, but also for every American who currently relies on their broker to explain their benefits and advocate for them when there is a problem.

I believe it is critical that the broker not be categorized as an administrative cost — especially as those costs are the biggest target in the reform packages. We also want to make sure Congress doesn’t do anything that removes us from the system, or removes the value that we know we add for the customer.

So let’s consider the doomsday scenario for brokers.

If the current threat comes to fruition and brokers like myself are put out of business, I’m certain there will be a consumer advocate of some sort under any new model that is adopted. Like with many government-run programs, will these be poorly trained people be truly knowledgeable about how the system works? Will they be advocates for their customers? Will they have the time, resources, or incentive to spend five hours on the phone in a day — as I often do — arguing for a patient’s health insurance rights?

Not likely. Indeed, odds are good that we’ll end up with internet-based FAQ pages filled with complex explanations. I can foresee the day when trying to understand your health insurance benefits will resemble trying to understand how to do your taxes. Will we look back on these days as the good times for our health insurance benefits?

Needless to say, I believe strongly that brokers are an important part of the health care system. I hope to have the privilege to continue to do my job for many years to come.