Clear As Mud

When is selling not selling? Where is the line between helping your customer and primarily helping yourself? Determining that becomes harder each day.

One of my clients needed to talk. She had received a disturbing phone call at her home and wanted to know if she had handled it correctly and if I knew the back story. Mary (not her real name) was contacted by a national pharmacy. We’ll call the pharmacy chain Mega Rx. Mary was advised that her insurer would no longer cover medications for her and her family from their local Mega Rx. Since they knew that Mary would hate to loose access to Mega Rx, they would be happy to connect her to someone who could help her find an insurance policy that would allow her to retain them. All she had to do was stay on the line. Mary thanked them but said that she already had an agent and hung up.

Think about this for a second. The national drug store chain had fought and lost a battle with a national insurer. They were mining their records for anyone who had that insurer and had had a prescription filled in the last year or so. And if Mary was gullible and not paying attention, she might have somehow been talked into different insurance that would have definitely covered Mega Rx, but might not have covered her doctor, or given her and her family the same level of coverage.

The appointment to change individual health insurance policies usually takes an hour in my office and involves a lot more than whether or not Mega Rx is in the network. This silliness is taking place under our current set of rules. The states and the federal government are still writing the new rules. Some people don’t think we really need licensed agents. Why not let anyone sell insurance?

I just spent twenty minutes completing my application to renew my license to sell life and health insurance. I had to prove that I had completed 21 hours of continuing education and 3 additional hours of ethics training in the last two years. I actually had a total of 42. That does not include the 7 to 9 hours per year for Medicare products or the mandatory additional training for long term care coverage. I then attested that I haven’t been convicted of any crimes, haven’t had my insurance license suspended or revoked, and that I don’t owe back child support. This is true. You can not sell insurance in the State of Ohio if you owe back child support. I paid my $5 and I should get an approval notice some time next week.

All states have seen a value in licensing insurance agents. It is obvious that one value of the requirements is to weed out the part-timers. The public is better served by committed professionals who are willing to take the time and effort to stay current. And though insurance agents (me included) will never be confused with rocket scientist, we do serve an important function in the market as we help the insured public acquire coverage and navigate the process to get the most from their contracts. The insurers long ago (begrudgingly) accepted our value.

This brings us to the Patient Protection and Affordable Care Act (PPACA). The authors of this legislation did not believe that the public is capable of calling an insurance agent or company or shopping online to purchase health insurance. Since finding health insurance was so difficult, insurance exchanges, a marketplace, would be created in each state. As you can see from the Obama administration’s website, the exchanges, an additional layer of bureaucracy, is going to save you money. And how will you get to the exchange and who is going to help you choose the right type of policy for you? That would be the Navigators.

The PPACA is pretty sure that almost anyone that can fog a mirror is capable of doing my job. Any employee of trade association or union can walk you through the process. In fact, the PPACA spends more time on the notion that the Navigators can not be compensated by the insurers than it does on training or qualifications.

A well publicized letter from David M. Casey, Senior Vice President of MAXIMUS, a company that specializes in Medicaid enrollment, details the Patient Protection and Affordable Care Act’s aversion to professional insurance agents.

John Doak, the Oklahoma Insurance Commissioner, is succinct in his judgment. He has consistently challenged the federal government’s intrusion into insurance regulation and health insurance. He has asked what kind of training the Navigators will have in insurance products, health information privacy regulations (HIPAA), or ethics. And of course we already knew the answer, none.

The other question is “Who will be paying the Navigators”? You have two choices. Either the Navigators eventually become employees of an endlessly growing government program, or they are employees of organizations who have something to gain by you and I being steered into one policy versus another. And that brings us back to Mega Rx. The major pharmacy chains are currently exploring ways to have employees become Navigators under the future exchange program. Will they be impartial? Will they be looking out for your best interest? Will the sun rise from the west tomorrow morning?

This is too easy and way too transparent a case of conflict of interest. What if a major insurer is donating money to your local trade group? The employee of that trade group would work to navigate people to that company’s policy. There is a lot of money involved. This won’t be subtle. And it won’t be easily traced.

So when you get that phone call from the drug store, or the doctor’s office, or the Chamber of Commerce, and you will one day, ask yourself why. Slow the process down and try to determine who is getting paid and for what.

In the interest of creating transparency and simplicity, we have failed at both.