Agents oppose government-sponsored health care

As Congress starts to take up health care reform, a group representing health insurance agents is voicing its dissent over President Obama's call for universal health insurance. Specifically, the Association of Health Insurance Advisors, which is a part of the National Association of Insurance and Financial Advisors, is opposed to having a government-sponsored health plan as an option within any health care reform plan passed by Congress. Such a plan would represent a major step down the road toward a single-payer, government-run health care system, the Falls Church, Va.-based group said. In explaining the AHIA's opposition, executive vice president Diane Boyle said, “We're trying to lay down those issues that would cause us to do anything less than embrace reform.” So far, relatively little is known about the administration's plan for health care reform. But the AHIA is hoping to get the attention of Congress as those plans are being developed. Toward that end, the association's members are contacting members of Congress who serve on the committees that are working on health care reform, Ms. Boyle said. During his election campaign, Mr. Obama called for health care reform that would give Americans access to a government-sponsored health plan. Nancy Ann DeParle, director of the White House Office of Health Reform, has also called for a public plan option, and Kathleen Sebelius, the secretary of the Department of Health and Human Services, has supported that position as well. But public plans often are underfunded, Ms. Boyle said. Under the government-sponsored Medicare plan for the elderly and the Medicaid plan for the poor, “We've seen payments to providers cut,” she said. In addition, many people who are eligible for Medicare and Medicaid aren't taking advantage of the plans, Ms. Boyle said. “Instead of creating another public plan, we'd rather see enrollment in the existing public plans tackled,” she said. Linda Douglas, director of communications for health reform in Ms. DeParle's office, dismissed the group's concerns. “What the president has proposed is building upon our current system,” she said. “He wants to work with Congress to enact health reform that will not only cut costs and assure quality and affordable health care for all Americans, but it will guarantee you your choice of plans and doctors, and it will enable you to keep your current plan.” But critics say that the creation of a public health care plan would likely mean higher costs to those with private insurance as health care providers look for ways to offset lower government payments. If that happens, “people will shift into the public plan because it is so much less expensive,” said Bill Foudy, president of Foudy Insurance Agency Inc. in Los Angeles and president-elect of the AHIA. “The costs in the private plan would escalate and we would be out of business.” Access to care in other countries that offer public health insurance is “extremely limited or some care is even denied,” said Mr. Foudy, whose company sells health insurance to companies that range in size from 51 to 1,000 employees. Health insurance agents also are worried about plans outlined by Mr. Obama during his campaign to set up government-run health care exchanges to provide low-cost health insurance.

LIMITED OFFERINGS?

The combination of a public plan along with government-run health care exchanges would lead to limited plan offerings and fewer outlets for consumers to buy health insurance, predicted Roy Ramthus, president of HSA Consulting Services LLC, a Silver Spring, Md., employee benefits consulting firm. He led the Department of the Treasury's implementation of the health savings account program in 2004 under President George W. Bush. With HSAs, policyholders must buy health insurance plans with very high deductibles. They can then fund tax-advantaged HSAs and use funds from the account to pay medical bills. The aim is to make consumers more economically conscious of health care choices and to bring more market discipline to the health care industry. Many health insurance agents sell HSAs. If plan offerings and sales outlets are limited, it would likely result in less of a role for health insurance agents, said Robelynn Abadie, president of Abadie Financial Services LLC in Baton Rouge, and president of the AHIA. Most of Abadie Financial Services' revenue comes from health insurance sales to small businesses. “If it becomes a government plan like Medicare and you have a federal employee who is just giving you paper to fill out, you don't have that personal touch,” Ms. Abadie said. E-mail Sara Hansard at shansard@investmentnews.com.