NAHU The Role of the Health Insurance Professional in Educating America by Scott Leavitt NAHU President
Introduction To help licensed agents, brokers & consultants understand that they have a serious responsibility to educate consumers in matters beyond simple sales and service of insurance products.
The role of the agent: Historically, agents have been viewed as representatives of the insurance company Regulators place agents in the position of public trust due to handling of funds and dispensing advice How do consumers view agents?
Traditional Expectations What consumers expect from their agent: Represent them before insurers Make complicated issues simple Human resource services Objective evaluation of options Honesty, Integrity, Character
Modern Expectations: Be an Advisor Be an Advocate Be a Consumer Educator
Modern Expectations: To educate them about what the consumer can do to help keep costs down To bring new products/solutions to the table To be knowledgeable regarding continuing changes in the laws (Cobra, HIPAA, etc..)
AHU Member Tools
What Do Health Insurance Products Do? The products we sell finance America s health care. The US spends 16% of its GDP on health care; that s $2.2 trillion dollars. Private health insurance covers 60% of Americans more than 175 million people. Public programs account for the other 40%.
2.5 2.0 U.S. Medical Costs Are Rising Drastically What solutions address this cost increase? Medical Inflation Rose 112.5% 1.5 1.0 General Inflation Rose 28.8% 0.5 '98 '99 '00 '01 '02 '03 '04 '05 '06 Year Kaiser Family Foundation, Health Care Costs A Primer, August 2007; OECD Stats, 2007
Health Insurance Costs How Much Can Private Insurance Costs Be Affected? Claims Cost 86% Administration 14% 1/3 Taxes Centers for Medicare & Medicaid Services, 2004
A good agent provides: Market product access & knowledge: About risk assumption products About Service providers Regarding HSAs, HRAs, HDHP s, PPO s, HMO s, etc About other health products- LTC, DI, Medicare, Voluntary benefits
A good agent provides: Legal & Regulatory assistance: Knowledge of state & federal laws that affect insurance & benefits Knowledge of recent changes in these laws & their effect on clients Translation of complex legal issues into understandable bullet points Help for consumers to help them understand policy provisions before claims are made
A good agent provides: Information to consumers about cost drivers An aging population- Americans are living longer - in 10 years spending on the elderly will total $1.8 trillion
A good agent provides: Information to consumers about cost drivers Pharmaceutical costs - The average cost of a prescription $54.58 Drug costs are expected to rise from $224 billion in 2005 to $521 billion in 2014 Consumers need to always ask for a generic equivalent if available
A good agent provides: Information to consumers about cost drivers New technologies There are new and advanced treatments coming out each year. These new treatments cost more than the old treatments The new treatments are not always more effective than the older
A good agent provides: Information to consumers about cost drivers New Technologies Spending on medical technology has accounted for about 20% of the growth in health care spending and now exceeds $200 billion a year.
A good agent provides: Information to consumers about cost drivers Behavioral and lifestyle choices Key drivers in increased health care costs are unhealthy behavior choices (smoking, alcohol abuse, obesity) - more than 60 million Americans are obese
Constraining Medical Costs Determinants of Health Status Lifestyle Choices 50% Genetics 20% Access to Care 10% Environment 20% Mercer Management Journal 18, The Case for Consumerism in Health Care
A good agent provides: Information to consumers about cost drivers Behavioral and lifestyle choices Obesity and other behavior choices are leading to serious conditions such as: cancer, diabetes, heart disease. Consumers are seeking medical solutions rather than practicing wellness.
Single Largest Health Care Drivers Spending Over Time 25% 25% 20% 20% 15% 15% 10% 10% Rise in Treated Disease Prevalence Linked to the Rise in Obesity Accounts for 62% of Rise in Per Capita Spending Heart Disease Diabetes Cancer Depression High Blood Pressure Back Problems 5% 5% 0% 0% ''91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01
A good agent provides: Information to consumers about cost drivers Health Care inefficiencies Duplication of care and preventable errors account for billions of dollars each year.
A good agent provides: Information to consumers about cost drivers Unnecessary visits and prescriptions 25% of Dr. visits and 55% of emergency room visits are medically unnecessary. The AMA reports that 7 million doctor visits each year are for sore throats and only 15-36% of these visits are due to strep throat.
A good agent provides: Information to consumers about cost drivers Many consumers are being effected by the advertising for prescription drugs on television. Many unnecessary drugs are being prescribed because of consumer demand.
A good agent provides: Information to consumers about easily prevented infections Ask your medical providers to wash their hands & to remove their rings and ties. These carry germs. Preventable infections acquired at hospitals and clinics contribute to 90,000 American deaths each year and $50 billion in unnecessary medical expenses
A good agent provides: Information to consumers about cost drivers Cost Shifting Medicare and Medicaid s low reimbursements cause prices to increase for those with insurance. Those who can t pay for their care also cause prices to be higher for those who have insurance.
A good agent provides: Information to consumers about cost drivers Medical Malpratice Increased utilization Most consumers think the cost of treatment is only a co-pay and therefore it is inexpensive for them to receive more care.
Constraining Medical Costs How Much Can Private Insurance Costs Be Affected? Other Claims Cost 45.1% Uninsured Cost Shift 8% Administration 14% Government Cost Shift 9.5% Margaretann Cross, Confronting the Medicare Cost Shift, Managed Care, Dec. 2006 2003 Health Affairs, Kaiser Commission Report on Medicaid & the Uninsured Behavior 15% Inefficiencies 3.3% Malpractice 5%
Can agents make a difference in consumer behavior? We can ask our clients to become consumers of health care. They need to know how to shop for good health care based on price and quality. They need to obtain medical care only when medically necessary.
Can agents make a difference in consumer behavior? We need them to ask questions of their medical providers as to what care is best for them - not what is most convenient for the provider. Agents can promote wellness We all need to encourage our clients to eat right, exercise and to promote healthier lifestyle choices.
Consumer Tools
Consumer Tools
Improving our image: All Health Insurance professionals should be a member of NAHU. We can t communicate enough with our clients and the public. Be at the front edge of legislative and regulatory issues don t be the last to find out about changes.
Tools
Improving our image: Educate your staff and vendors as to what you do and what are your expectations in terms of customer service Strive for a win-win scenario in conflict resolution between clients, insurers and providers Be firm yet fair with the parties you deal with in conflict resolution
Improving our image: Let your clients know how important you are to the process Be honest with your clients about what you do for them, how much your paid and your role as their advocate
Improving our image: Improve our image to clients as being dependable, trustworthy and knowledgeable. Improve our image to Peers as being a person with integrity within the industry
Improving our image: Improve our image to carriers as being a good field underwriter and having excellent knowledge of products Improve our image with legislators as being an advocate of the free market system and guardian of consumer and carrier success. Educate the Legislators- get to know them.
Legislative tools
Future concerns: A Single Payer System and other heavy-handed health reform (Connectors) A decreasing agent population Lack of education regarding Agent Value Long Term Care Crisis Uninformed consumers
Summary/Conclusion The role of the agent has never been more important People relate to people not to institutions agents are in prime position to communicate key issues We have relationships with clients that trust us and it is our job to help educate them If not us then who? If not then when?
Summary/Conclusion We are the grassroots of the industry and can make a difference Citizen lobbyist Be a source of solutions Be an educator Get engaged in the process Tell our Message Educate America
Summary/Conclusion Agents have a public trust and must prove their worth Education, professionalism, ethics Association s role in preserving our industry and the consumer choice Agents must do more public service and consumer education Agents must lobby on behalf of their clients at all levels of government