Agents Make Annual Pilgrimage to Capitol Hill

The Big “I” put out the call and hundreds of agents answered by coming to Washington, D.C. to lobby members of Congress and their staffs on pressing issues that directly impact the independent agency system.

On April 30, busloads of agents took part in an annual pilgrimage to the halls of Congress to discuss issues of interest to the Big “I” and to remind the nation’s decision makers that independent agents are in every state and in every district, and that they participate in the legislative process. Almost all meetings included discussions about federal regulation, health care reform and agent licensing reform.

Federal Regulation: The looming threat of federal regulation of insurance, including the threat of an optional federal charter (OFC), was again at the top of the agenda at the Big “I” Legislative Conference & Convention. As the Obama administration and Congress consider restructuring the financial services regulatory system, the Big “I” continues to guard against efforts that could hurt independent insurance agents and brokers.

Health Care Reform: Big “I” members stressed that independent insurance agents and brokers play a crucial role in the sale and delivery of health insurance and vigorously oppose any effort to eliminate that role. Agents also advocated on behalf of preserving the private delivery of health insurance and voiced their opposition to the creation of a public plan that would compete against private insurance companies in the health insurance marketplace. Since thousands of agents are small businesspeople, many took the opportunity to express their opposition to paying for health care reform by levying a tax on employer-provided health care benefits. Such a tax increase will only further drive-up health care costs, undermine the successful employer-based system and deliver a big blow to the thousands of small businesses that form the backbone of the economy.

Agent Licensing Reform: In their meetings with congressional offices, agents also advocated for sound legislation, such as agent licensing reform. One of the biggest headaches agents deal with is the duplicative, costly, time-consuming and ineffective licensing process which requires them to be licensed in every state in which they conduct business. This process hinders the ability of agents and brokers to effectively address the needs of consumers since the average independent agency is authorized to operate in at least eight states and it is not uncommon for small and mid-sized agencies to be licensed in 35–50 jurisdictions. The solution lies in a legislative effort commonly referred to as NARAB II, which many agents asked their congressional representatives to co-sponsor.

The best lobbyists are the agents who live, work, vote and are active in each state and congressional district. One agent’s meeting with their congressional representative could make the difference in how that member of Congress votes on a bill that could help or hurt thousands of agents across the country. The process doesn’t stop after the Big “I” Day on Capitol Hill, but continues with a team of lobbyists in Washington, D.C. and through the ongoing grassroots campaign. Agents interested in getting involved can contact Jen Dlugasch, grassroots programs and InsurPac director, at 202-863-7000.

Margarita Tapia (margarita.tapia@iiaba.net) is Big “I” director of public affairs.


Health Insurance Public Plan on Docket

The debate rages on in Washington, D.C. regarding the merits of a public plan that would compete with private plans in the health insurance arena. Supporters of the public plan believe it will keep health carriers efficient and lower health care costs. The Big “I” agrees the country must take drastic steps to reform the broken health care system and lower costs, but believes that goal can be accomplished without creating a government-run health insurance plan. The creation of a public plan would have a devastating effect on the private market, on health care consumers and on independent agents.

A public plan would not improve the private market; it would do just the opposite. According to a 2009 Lewin Group Study, if the public plan’s reimbursement rates are similar to Medicare, an estimated 119 million people could shift from private insurance to the public plan. The current federal program sets artificially low reimbursement rates for doctors and hospitals, which means they take a major hit when they treat Medicare and Medicaid patients and those costs are ultimately shifted to private insurers and their consumers. If the proposed public plan is instituted, the private market would likely collapse within years of implementation and eventually leave the United States with a single-payer system.

Since the government sets unreasonably low reimbursement rates for Medicare and Medicaid, many physicians already opt not to treat these patients. A June 2008 report by the Medicare Payment Advisory Commission found that 29% of Medicare beneficiaries had problems trying to find a primary care physician and it was even more difficult to try and find specialists. For example, the New York Times reported on April 6 that of the 93 internists affiliated with New York Presbyterian Hospital, only 37 accept Medicare patients. Unfortunately, there is a great distinction between health insurance and quality health care and that distinction is much greater when the government serves as the health insurance carrier. The Big “I” will continue to argue that this distinction should not be lost on policymakers as they debate this important issue in the next few months.

-M.T.