When Good People Do Nothing
Speaker of the House Paul Ryan and the newly minted Trump administration vowed to replace what some called the “Obamination” with a national health strategy that would return insurance plan choice to individuals.
Libertarians rejoiced. Single men celebrated not having to purchase maternity benefits. The cavalry appeared to be on the way to repeal the Affordable Care Act and change the trajectory of a new entitlement that would add $1 trillion to the public debt over the next decade.
Many in the brokerage community seemed excited at the prospect. But they failed to read the Republican bills closely. Key elements of the GOP legislation were fixated on taxing employer-sponsored benefits as a means to finance new reform. The hastily assembled legislation proposed tax credits indexed to the Consumer Price Index and eliminating both the individual mandate and most taxes currently funding the ACA. The proposed law would return America to a time when healthcare was still a privilege, not a right—and certainly not a social obligation.
The Trojan Horse
Under Trump’s plan, the aforementioned tax credits would replace ACA subsidies indexed to premiums. Very quickly, premium assistance to purchase health insurance would prove inadequate for most of those who received aid, forcing them to drop insurance altogether. The bill emphasized access over affordability. This was a bit like declaring everyone has the right to live in a 10-bedroom mansion and drive a Maserati—as long as they can afford them.
Who are we fooling? The Congressional Budget Office estimated at least 24 million people would lose their insurance within a decade. Proposed block grants to states would do little to increase coverage for Medicaid.
The GOP replacement plan was essentially a Trojan Horse to strip $330 billion from entitlement spending and presumably use it to build a border wall, increase defense spending, finance infrastructure and enact a sizable tax cut. This would all be done by eliminating all the taxes that funded Obamacare, presumably without taxing employer-sponsored benefits or shifting more taxes to the wealthy or to business.
I was bemused by how many in our industry—America’s Health Insurance Plans, brokers and other stakeholders—chose not to speak out in support of the ACA and said nothing in opposition to the reckless replacement bill.
Many of us believe it would have led to a more rapid erosion of employer-sponsored insurance and to a road to Medicare for all. The healthcare community shuddered—on the heels of years spent reorganizing around reimbursement reform, health information technology mandates and the formation of integrated care delivery systems.
The promise that the American Health Care Act would somehow result in higher wages and a spike in GDP due to bigger paychecks seemed delusional. Instead, it would result in more cost shifting in the form of higher deductibles and a declining menu of benefits.
Do the Right Thing
The first time I was interviewed by The New York Times after leaving a major health insurer as its regional CEO, I gave a balanced opinion of how health reform might affect insurers and what industry practices should be changed. The backlash was immediate. It was clear if I were to be effective in my dealings with stakeholders who controlled markets, I must choose my words more carefully.
Turmoil creates a false sense of lifetime employment. Aside from a moral obligation to be the best fiduciary possible, brokers did not feel emboldened to speak up and criticize the institutions driving rising costs—including HR and benefits decision makers who sometimes make decisions based on what will be least disruptive instead of what will derive the most value for their firm.
While there seemed to be no shortage of Obamacare critics in our industry, those same voices were quiet about repeal and replace. Understandably, when your role as an intermediary is at risk, you will always vote with your pocketbook. While benefits brokers exist in every country that has nationalized healthcare, there is an uninformed belief that disintermediation is tantamount to unemployment. Good consultants know there is always a role to play in advising clients’ concerns. Serving as an intermediary is like being a physician. There is an implied Hippocratic oath to do no harm. Sadly, the lack of transparency, the transactional natures of unscrupulous agents and brokers, and misaligned incentives can cause intermediaries to violate the trust of generalist employer purchasers who depend on them.
Many in our industry have benefited by the rising costs. Many brokers still receive commissions instead of fees, resulting in generous cost-of-living increases each year that do not track with their transactional contributions.
The good news is there are thousands of advisors who do an outstanding job and care deeply about our reputation as a leading voice on behalf of our clients—the employers. As competition becomes more transparent, a growing number of advisors are having the courage to employ transparent practices that can restore them as the air traffic controller for all stakeholders. In the words of one competitor whom I respect, “I’d rather be respected than liked.”
It’s often said the best disinfectant is a little sunshine. Pols will fight out of self-interest instead of moving toward what they know is right. It’s time for our industry to step up. Express your opinion on how to fix our system. I’d like to think we are planting trees under which we may never rest.
It’s time to surgically remove opacity, self-dealing, incompetent and rapacious intermediaries. It’s time to lay a foundation that won’t bankrupt our children and will take care of the least among us. Let’s be the model for transparency. Let’s be vocal in our desire to fix Obamacare.
We start by rebranding it to what we hope it will become instead of fixating on trashing the Obama legacy. No more spreading alternative facts. It’s our time to show a little leadership and find a responsible set of solutions. Whether healthcare is a right, a privilege, a moral obligation or a consumer choice, we need change, and we want our best and brightest at the table to help our legislators.
Let’s get on with the cure instead of continuing to benefit from healthcare’s prolonged illness. In the words of Don Berwick, former administrator of the Centers for Medicare and Medicaid Services: “The best hospital bed is empty, not full. The best CT scan is the one we don’t need to take. The best doctor visit is the one we don’t need to have.”
Turpin is author of 53 Is The New 38: Tales of Indignity and Middle Age. He also happens to be EVP of USI. Michael.Turpin@usi.com