Who could have seen it coming?! A federal program that protects 5.6 million U.S. homeowners from catastrophic flood losses is extended for short periods of time over and over and over again, and instead of dealing with funding issues, Congress instead passes yet another 30-day extension and keeps the program swirling in a governmental morass. Surely, Congress can’t be that irresponsible! More of this entry »

As an insurance agent for the past 15 years, I have never been more satisfied with my job of helping our seniors maneuver through the enrollment process of Medicare.

As people reach that magic age of 65, they are confronted with a triage of decisions to make. It’s what they don’t know is what can hurt them. Should they enroll in Medicare if they’re employed with health insurance benefits or simply stay on the employer’s plan? Should they enroll in a part D plan while they’re working?

This is where the experienced agent comes in. We help our prospects in the enrollment process and explain all of their choices to them in plain English.

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With the advent of the Supreme Court argument, all parties involved in the health insurance business are waiting. This is particularly true of health insurance carriers. Each insurance carrier to date has made adjustments to their business based on their best interpretation of the Patient Protection and Affordable Care Act, the federal health reform law.

Unfortunately, every carrier’s interpretation of the law has been different.

What’s Next

Even after the Supreme Court rules, many months of uncertainty will continue. If the Supreme Court rules against Obamacare in its entirety or in parts, the insurance carriers will decide what is in the best interest of their businesses. Some will move forward with their plans. Some will roll back the implementations they have already completed. In all cases, the impact of the Supreme Court’s ruling will be different for each carrier.

It’s A Political Year

There will be many political interpretations after the Supreme Court ruling. Candidates will be running for, against or from Obamacare. If a new party swings to power, they will present their own vision of healthcare. It is inevitable since the healthcare insurance question has now been elevated to a top political issue.

What Should Brokers Do?

What to do during this time of ever increasing uncertainty? Don’t speculate, don’t guess, the only thing certain is uncertainty.

Insurance professionals must do what they do best: Take care of their customer’s needs.

Find the most affordable coverage available for your client. Make sure your clients are not placing themselves in a compromised coverage situation based on some speculation on the future of health care.

When Will The Uncertainty End

I anticipate 8 to ten months of tremendous uncertainty. The best path for continued success is to ignore the urge to speculate and consistently take care of your customer’s needs with the existing tools available in the marketplace.

Jeff Kubik, an attorney with an MBA from the University of Chicago, brings more than 30 years of experience to his company, Employee Benefit Risk Management (EBRM). EBRM has first-hand knowledge of what it takes to process claims and manage risk in the individual medical and small-group markets. Working exclusively with brokers, EBRM currently meets the needs of more than 4,000 agents with policies totaling more than $300 million in premium covering over 50,000 primary insureds. If your firm seeks additional guidance on health reform and how the marketplace must meet the needs of the individual and group markets, please email contact[at]falkpr[dot]com or call 847.675.2580 to arrange an interview with EBRM founder Jeff Kubik.

What happens if the Supreme Court strikes down the so-called Patient Protection and Affordable Care Act? Proponents claim that millions of Americans will lose benefits that they are already receiving. That is not necessarily true.

Almost all of what is in place now is not being paid for by the government through our tax dollars. Instead most of it is being paid for through our insurance premiums. The insurance companies have already changed their contracts to include them and they are unlikely to take them away unless both the insurance companies and the people being insured agree. Here is the list of the most prevalent provisions of the law which will most likely not change:

Unlimited Lifetime Benefits

Even before Obamacare most insurance plans provided unlimited lifetime benefits for services received from an in network health provider. Those plans that did not do so previously have already added them and have charged additional premiums to cover the cost.

Adult Children Remaining on Parent’s Health Plan to Age 26

Again, insurance companies have increased premiums to cover the cost of adult children remaining on their parent’s plans longer than previously. Before the law most plans allowed children to remain on their parent’s group health plan up to the age of 19 or, if in college, to age 22 or 23. Many states had laws in place before that gave employers the option of continuing coverage past those ages. For example, Pennsylvania law provides an option for adult children to remain on the plan to age 30. Since re-pricing products and changing rules costs time and money, it is unlikely that insurance companies will drop the age 26 provision from their contracts.

Preventative Care First Dollar Benefits

Many insurance companies already had these benefits in place before Obamacare. Others that did not have these benefits before now include them and have charged additional premiums to cover them. Repeal of the law would give insurers the opportunity to work with employers and individuals to have more flexibility on what preventative services are cost effective and which ones are pure window dressing.

Medicare Part D “Donut Hole” Coverage

Starting in 2011 the brand drug companies provide a 50% discount on prescriptions when a Medicare beneficiary reaches the coverage gap that is referred to as the donut hole. For 2012 the gap occurs when the total cost of drugs for a beneficiary reaches $2,840 under their Medicare Part D drug plan.

Again, the government is not providing this benefit. The drug companies are absorbing the cost as part of a deal they made with the White House to support and help fund the efforts to pass Obamacare in exchange for the Feds backing off on patent reform, price controls and the allowance of re-importation of drugs from other countries like Canada. If the drug companies now want to back off on their agreement the blame will be on them.

High Risk Pools for People with Medical Conditions

This is probably one of only two significant sections of the new law with direct taxpayer paid benefits. However, very few people national have enrolled in these health insurance plans. The costs have been too high and the administration too complicated. Without the new law, those covered should still be eligible for HIPAA (Health Insurance Portability and Accountability Act) protection and be able to qualify for other coverage.

Small Business Health Insurance Tax Credit

Providing tax credits for good employers who struggle to provide their workers with insurance is something I and others have advocate for during the last two decades. However, under Obamacare the rules for applying and receiving this credit are so complicated and restrictive that only about 300,000 small businesses across the country received any benefit. Repeal of the law would end this tax benefit. Overcompensating for the loss of this benefit would be the relief small businesses would receive from all the new regulations and higher premiums brought to them by Obamacare. A simpler, less complicated tax credit could be passed by Congress as a stand alone replacement piece of legislation.

So what really happens if Obamacare is struck down by the Supreme Court? Those receiving benefits already will most likely continue to receive them. However, the really good news is that the numerous new and onerous taxes go away. The thousands of pages of new regulations with their burdensome and costly requirements on businesses, health providers and health insurers go away. The massive new bureaucracies like State Health Exchanges, Accountable Care Organizations and Comparative Effectiveness Research Committees goes away. The micromanagement by Washington of our healthcare system goes away.

So what replaces Obamacare?

The states will continue to develop innovative ways to insure more people. Decisions on health care choices will go back to the people with the assistance of their local doctor. Reform efforts will continue. In order to focus on the three main goals of health care quality, health insurance affordability, and getting more people insured the emphasis must be on innovation, freedom of choice, education and incentives. What it can not be built around are reforms like Obamacare that rely on a system of forced coercion, penalties, over regulation, government spending and more taxation.

If you believe the theory that a single-payer system of health insurance is the ultimate goal of the Obama Administration and Democrats, then March 27 might prove an important day.

That morning U.S. Supreme Court Justice Anthony Kennedy raised the issue during the second of three days of oral arguments over the constitutionality of the Patient Protection and Affordable Care Act. It’s right there on page 25 of the 111-page transcript.

Discussing the means by which Congress can force Americans to act through a mandate, tax or penalty, Kennedy said, “Let’s assume that it could use the tax power to raise revenue and to just have a national health service, single payer. How does that factor into our analysis? In one sense, it can be argued that this is what the government is doing; it ought to be honest about the power that it’s using and use the correct power.”

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[Congress shall have power] “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”
   — U.S. Constitution, Article 1, Section 8, Clause 3

“Can you create commerce in order to regulate it?”
   — Justice Anthony Kennedy, U.S. Supreme Court, Tuesday, March 27, 2012, addressing U.S. Solicitor General Don Verrilli on his defense of the portion of the Patient Protection and Affordable Care Act that requires all Americans to purchase health insurance.

“What is left? If the government can do this, what, what else can it not do?
   — Justice Antonin Scalia, U.S. Supreme Court, Tuesday, March 27, 2012, asking U.S. Solicitor General Don Verrilli what limits the government might have if the PPACA’s requirement that all citizens purchase health insurance is found constitutional. More of this entry »

Somewhere between the time I wrote March 22 piece on the National Association of Insurance Commissioners, the group of state insurance regulators, (NAIC) and the time it was posted, the NAIC resolved one of the issues I raised: its identity.

You will recall that I discussed how the NAIC represented itself as a trade association at times and as an insurance regulator at times. For me, the discussion arose in the context of open meetings and transparency.

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Two years ago the Patient Protection and Affordable Care Act, also known as Obamacare, was passed by Congress.  On March 23, 2010 the President signed the bill into law.  At that time I wrote the article below.  Well, how did I do at predicting what would happen?  I think I was pretty close on most things.

I was correct that insurance premiums would continue to rise.  The “free” stuff like keeping junior on mom and dad’s insurance to age 26, unlimited lifetime benefits and additional preventative services do have a cost and are reflected in the premiums.

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The National Association of Insurance Commissioners, the organization representing each state’s insurance department, is a worthwhile venture because it serves to create uniformity in the regulation of insurance. Some moan that uniformity by a national trade association (more on that in a minute) is national insurance regulation, which is no better than federal regulation. I beg to differ.

For one thing, it is not federal regulation, an entirely different animal that would be controlled in Washington, D.C. Call what the NAIC is doing “national” if you wish, but whatever it does still takes place in your favorite state capital.

Another point of difference with the naysayers is that we should not have an automatic reaction to the thought of federal regulation. As proponents of an optional federal charter (whatever happened to that quaint notion?) would say, life with one regulator by definition is better than life with 51 regulators. Maybe they are right. At least show them some respect.

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A luncheon with a collection of insurance agents in the Washington, D.C., area recently put two important news stories in a new context.

A couple of insurance agents who sell property-casualty coverage said reports of a hardening market are greatly exaggerated. They hadn’t seen any evidence that rates were going up. Rather, they saw people going out of their way to find lower rates, which isn’t a surprise as many families cope with increasing costs and flat wages. That combination sends them looking anywhere they can for a discount.

Unfortunately, as one of the agents explained, that combination also makes those rate buyers extremely disloyal. That reality, in turn, means that they will go elsewhere the next time their payment is due.

But the big story of the day for the group, mostly life insurance agents and financial service professionals, was the California insurance agent convicted by a jury and sentenced to 90 days in jail for selling an indexed annuity to an elderly woman with dementia. The case is believed to be the first – and hopefully, only – case of an insurance agent sentenced to jail for his product sales. The shock waves throughout the industry are evident everywhere.

(For a thoughtful, comprehensives analysis of the annuity case implications, read Sheryl Moore’s piece.)

One agent admitted to the table that every agent who sells annuities runs the risk of criticism or worse when he sells a product. The group, based on the information available, supported the agent, arguing that his company supported the sale.

The takeaway for me was how precarious a position an insurance agent can find himself or herself in despite following all the rules and policies of his or her company. One luncheon guest put it best: “Whenever there’s some doubt, don’t do it.”

That wisdom applies to all business transactions and all of life – even whether to tackle dessert after a filling lunch.