Evaluating the Costs of Health Care: Obamacare, Trump and Beyond

Posted: May 24, 2018

Brokers and Providers Fight for More Money While Consumer Costs Continue to Rise

These days, it seems that everyone wants their pound of flesh from the health insurance carriers. Brokers want higher commissions, providers want bigger payouts and customers want lower rates.

And, in the midst of all this pressure, carriers face the constant volatility of legislation coming at them from the state and federal levels. Everyone wants more, but we’ve got to find a way to meet in the middle.

Consumers Need Lower Rates

Ultimately, everyone agrees that the consumer is most important. Double digit rate increases almost every year as of late have taken their toll. Rates have skyrocketed since the passage of the Affordable Care Act.

Everyone agrees that consumers need some relief. If you’re not getting a substantial tax credit from the government through Covered California or another one of the exchanges, then your rates are high. They’re too high!

Brokers Have Taken a Huge Hit

At a recent meeting with Blue Shield, one broker complained to top executives, “You pay the least of all the carriers.” The response from Shield, “Nothing is going to change.” At least not right now.

In the past, many felt that brokers may have been overpaid. Carriers like Anthem Blue Cross paid out 20% commissions back in the day. But all that has changed and health insurance brokers are exiting the market in droves.

In many cases, medical insurance brokers’ commissions have gone down 50-75%. That’s a huge pay cut for anyone, and brokers complain that they actually lose money selling individual plans.

Small and large group commissions haven’t been hit as hard, but payouts on individual and family plans have taken a beating.

Now that Obamacare has been around a few years, perhaps consumers don’t need as much help navigating the health insurance marketplace. Hopefully that’s the case because there are less and less licensed agents able and willing to help them now.

Some brokers who sell multiple lines complain that their commissions on other products are going down as well. This is true even for insurance products that are not as heavily regulated by the government as health care.

Provider Profits Have Dropped

Many have difficulty feeling compassion for insurance brokers and the medical industry. One of the big goals of the Affordable Care Act was to decrease the costs of health care, which ultimately means less income for health care providers.

By providers, we mean our surgeons, doctors, nurses, pharmacists and other health care practitioners. We want to attract people to the medical industry. We want to attract well-educated, capable people to this industry.

However, lowering the compensation of healthcare providers may undermine the goal of attracting enough quality workers to this field.

The Bottom Line

The rising cost of health care is a difficult problem for us to solve. And, everyone has to chip in. If carriers give in to the demands of everyone, they will go bankrupt and then we won’t have any health insurance companies.

So the key is to find a middle ground. Brokers and providers have to find a way to function in the new world of lower payouts. Everyone, including the carriers, has to find ways of streamlining and doing things more efficiently.

President Trump and the conservatives say we should throw out Obamacare and go back to the old system. But they haven’t been able to pass the legislation.

Also, keep in mind that we got rid of the old system for a reason. A lot of people were unhappy with it. It had problems! Many couldn’t afford healthcare and some could not even get insurance.

Others say we should throw out Obamacare and create a single payer system. But no one seems to know how to pay for it. And, many countries who have gone that route are finding that it is severely taxing their economies.

No one’s going to like me for saying this, but probably, the middle road is the best. We need to prop up Obamacare and help it succeed.

The conservatives want to undermine it, but that’s only going to create a mess that will give more fuel to the liberals to create a single payer system. But, if we go with single payer, likely it will hurt our economy and undermine the quality of life for all in America.

If we can stop jumping to extremes, hopefully we can fix some of the problems of Obamacare and create a system…that no one is going to be perfectly happy with…but a system that will work.

There is a middle ground, and it requires everyone to make sacrifices!