Washington DC Healthcare Rally on July 15th

Gerard Denys and Matt Reynolds will be flying into Washington to make our voices heard on healthcare. Hopefully we will be able to meet our representatives to express our opinions concerning the unworkability and unconstitutionality of most of what is being proposed. The huge price tag tends to make me quiver and should scare my children and their children. We would be selling out our children's future for our own comfort. Something seems very wrong with doing that.

Focus on the need and not the sale

Many agents attempt to "force sell" prospects. What I mean is they go prospecting with a mindset of what they want to accomplish. What they should be doing is asking the client "what is it that you need or want" Check out this link for some great information. http://tinyurl.com/nmex29

Why you HAVE to offer all products

An agent has a fiduciary responsibility to offer prospects all of the products that they offer. If the client has a loss and you have not explained all the different types of policies you offer they may attempt to prove you were negligent, which in my opinion you would be. Check out this link on cross selling. http://tinyurl.com/32ao43

Our Sick Healthcare System

An article from Health Underwriters:

Why Government-Run Public Plan is Misguided 

 

 

• Reforms to the private insurance markets are widely recognized as necessary. But 

the creation of a government-run public plan is a bad idea and a waste of 

resources that would likely displace tens of millions of happily insured Americans 

and exacerbate the worst elements of our current system: gross inefficiency, high 

costs, and bureaucracy. Creating a mammoth, complex, hugely expensive, ill- 

designed reform that is not likely to be popular when understood. 

• As a prominent Lewin study concluded, a government-run public plan would 

likely attract consumers not by virtue of superior performance on cost control and 

quality, but by its ability to exploit unfair advantages that would tend to shift and 

hide its costs away from enrollees and enrollee premiums.1 Nearly 6 out of every 

10 Americans (118 million) with private coverage could lose their current health 

care coverage, and 130 million Americans could end up on a government-run 

health care plan if the government sets payment rates at Medicare rates. 

• Expansion of government-run programs could also exacerbate the cost-shift that 

already drives up average health care spending by $1,788 (or 10.7 percent) 

annually per family.2 A government-run plan would exacerbate the cost shift 

because when government payment rates are too low, providers shift costs to 

private payers to make up the difference. 

• Existing public plans provide less coverage and restrict provider access more than 

the average employer-sponsored plan. The Congressional Budget Office (CBO) 

estimated that the benefit package for Medicare is 15 percent below the average 

employer-sponsored plan. Under Medicaid, specialists are often inaccessible 

without long waits. Under a new government-run plan, Americans will find it 

more and more difficult to make appointments with physicians and other health 

care providers. This is because lower payments will make it increasingly 

unaffordable for providers to see patients—particularly the increasing number of 

patients with public coverage. 

o MedPAC: 30% of Medicare enrollees seeking a new primary-care 

physician have difficulty finding one 

o MedPAC: 30% of physicians taking no new Medicaid patients 

• Public programs like Medicare moreover lag behind the private insurance industry 

in terms of containing cost and improving quality. Medicare just recently started 

refusing to pay medical care providers for ‘never events’ where a patient suffers a 

knowable and catastrophic mistake such as having the wrong limb removed. The 

private insurance market has been doing this for years. 

• A government-run plan like Medicare does not have to comply with varying state 

insurance regulations nor does it have to underwrite applications because 

                                                 

1 

 The Lewin Group, “The Cost and Coverage Impacts of a Public Plan: Alternative Design Options,” Staff 

Working Paper #4, April 6, 2008.   

2 

 Millman, “Hospital and Physician Cost Shift Payment Level Comparison of Medicare, Medicaid, and 

Commercial Payers,” December, 2008. 

 

Medicare is open to all seniors at the same cost. Reforming the insurance market 

could significantly reduce administrative costs for private plans. 

• Private insurers must build provider networks. These networks can include high- 

value providers and exclude low-quality providers. Except for certain 

circumstances, including criminal acts, Medicare is forbidden from excluding 

poor quality providers. It lets in everyone who signs up. So one question to ask is, 

will a public plan have Medicare’s indifference to quality -- or invest in the cost 

of a network? 

• Private insurers must negotiate rates. Medicare just fixes prices using a statutory 

and regulatory scheme. And anyone who imagines a public plan would be less 

costly than private plans must keep the following issue front and center: In the 

many procedure categories where Medicare’s statutory price does not cover full 

provider costs, shortfalls are shifted to private payers who end up subsidizing the 

public program. So, will a public plan negotiate rates or simply use fiat as a 

means of gaining subsidies from private insurance? 

• Private insurers must combat fraud -- or go out of business. Indeed, these payers 

have every incentive to invest in antifraud personnel and strategies down to the 

point where return and investment are equal. But anyone who thinks that a public 

plan could serve as a "yardstick" for the private sector needs to consider 

Medicare’s dismal record with regard to fraud, waste and other abuse. 

• In fact, the total amount of Medicare fraud is unknown. The government does not 

measure or estimate fraud in its programs; instead, it measures payments made “in 

error.” According to Medicare's own most recent data, payments made in error 

amount to over $10 billion annually. (Medicaid's payment errors in 2007 equaled 

a whopping $32.7 billion, according to a report by the Department of Health and 

Human Services.) Others have claimed Medicare’s payments made in error are 

much higher. Even with the inclusion of the budget of the inspector general for 

the Department of Health and Human Services, Medicare spends less than one- 

fifth of 1% on antifraud measures -- a small fraction of what private plans invest 

in their efforts to build a network of honest providers. 

• And because of the vagaries of politics, in four of the past five years Congress has 

turned back Medicare’s pleas for $579 million of additional antifraud funding, on 

the grounds that these dollars subtract from the budget funds for curing cancer 

and anti-obesity campaigns. Based on experience, Congress will always 

underinvest in fraud. Yet according to a House of Representatives Budget 

Committee hearing in July 2007, return on investment for certain Medicare 

antifraud measures were estimated to be in excess of 13-1. Will a public plan also 

hemorrhage from fraud because of chronic Congressional underinvestment? 

o “The significant size of Medicare’s erroneous payments suggests that the 

program’s low administrative costs may come at a price.” MedPAC, March 2009 

o “The traditional fee-for-service Medicare program does relatively little to 

manage benefits, which tends to reduce its administrative costs but may raise its 

overall spending relative to a more tightly managed approach.” CBO, December 

2008 

Private administrative costs cover important services like disease management programs 

and research to determine which interventions actually work. It is ironic that the same 

advocates who frequently cite the need for the government to spend billions in taxpayer 

dollars to improve health outcomes are the same who decry the high administrative costs 

in health care plans. As Ezekiel Emanuel, an adviser to President Obama on health care 

(and brother of White House Chief of Staff Rahm Emanuel), wrote, “The idea that we 

could wring billions of dollars in savings [from cutting administrative costs] is seductive, 

but it wouldn’t really accomplish that much. For one thing, some administrative costs are 

not only necessary but beneficial. Following heart-attack or cancer patients to see which 

interventions work best is an administrative cost, but it’s also invaluable if you want to 

improve care.”3 Additionally, Medicare loses up to $60 billion to Medicare fraud each 

year due to inadequate scrutiny of claims. While private health providers pay (out of 

administrative costs) for programs to keep fraud to a minimum, the federal government 

invests little, and as a result taxpayers pay more. 

• None of these considerations should be interpreted as a defense of the status quo, 

or a denial of the fact that major health reform is needed.  

• The creation of a government-run public insurance plan would make the 

government the gatekeeper – the controller of prices and the provider of coverage. 

Health care decisions would increasingly be made in Washington and subject to 

political pressures that take into account neither patient needs nor economic 

realities. The cost of the program would be such that the effort to pay for it would 

become the central concern of American politics – crowding out other 

government priorities. As is seen around the world, health care is a central part in 

ballooning welfare states. 

• There are really only two ways to keep costs under control: by building a real 

marketplace in which cost-conscious consumers make choices in a more efficient 

delivery system or by imposing arbitrary limits, determined by the government, 

on care.  

                                                

3 

 Ezekial Emanual and Shannon Brownlee, Washington Post Op-Ed, “5 Myths on Our Sick Health Care 

System,”  November 23, 2008.