To: All NAIFA and AHIA Members
From: Cliff F. Wilson, CLU, ChFC, LUTCF, CLF, NAIFA President and Robelynn H. Abadie, CSA, LUTCF, RFC, AHIA - NAIFA Health & Employee Benefits President
Date: April 16, 2009
Subject: Oppose Public Health Plan that Jeopardizes the Agent

“A public plan is something that’s sponsored by the government, and therefore has very low or almost nonexistent administrative costs, compared to others. It doesn’t have the need to have brokers out selling (emphasis added); it wouldn’t have the need to have a lot of costs and profits, the way private plans would. So it has that advantage.”

These are the words of Nancy –Ann DeParle spoken at an April 15th Kaiser Family Foundation briefing. Ms. DeParle is heading up the new White House Office of Health Reform.  DeParle is actively meeting with member of Congress to push for a “public” health insurance plan option in an effort to defuse the issue as a sticking point in the healthcare reform debate that will unfold in Congress over the next few months.

Ms. DeParle’s remarks echo Congressional Budget Office (CBO) introductory comments included in its report Key Issues in Analyzing Major Health Insurance Proposals:

"In general, however, substantial reductions in administrative costs would probably require the role of insurance agents and brokers in marketing and selling policies to be sharply curtailed and the services they provide to be rendered unnecessary" (emphasis added).

NAIFA Position: NAIFA opposes including a government sponsored health plan as an “option” within any healthcare reform plan created by Congress. As an organization that believes the private health insurance system is best equipped to provide options for families and businesses, NAIFA is especially concerned with the public plan as a major step down the road toward a single payer, government run health care system.

Promoters of the government run plan option always state or imply that a government run plan that eliminates the role of the agent will lower administrative costs. But, administrative costs are not reduced simply by switching administrators – a government plan will not be less expensive unless services are reduced in some as yet ill defined way.  

Moreover, the hands on experience of agents indicates that most consumers benefit from access to professional assistance.  Licensed, fairly compensated, insurance agents offer a cost effective means of achieving personal and professional assistance in the selection of insurance coverage for individuals and employers of all sizes in all markets.

While opposing a government sponsored health insurance plan, NAIFA does support the goal of universal access to health care for all Americans. NAIFA’s proposals are outlined in the Rx For Health Care – The Advisors’ Perspective (available at www.ahia.net) that adhere to the President’s principles to help lower costs and ensure coverage is available to all citizens – without resorting to new government programs or jeopardizing the high quality of care we enjoy and expect as American consumers.

NAIFA also supports coordinated efforts to control the escalating cost of care including disease prevention, enhancing health information technology and using comparative effectiveness research while maintaining the strictest patient-doctor privacy standards as well as medical malpractice reform to reduce defensive medicine.

What You Can Do: Please contact your Members of Congress today and ask them to oppose a public plan option especially one that would eliminate the professional service of licensed agents. You can do this by email by going to NAIFA’s Legislative Action Center at http://capwiz.com/naifa and letting your two Senators and your Representative know that you oppose creating a government run health insurance plan competitor to the private sector. Members of Congress are finishing up a two week “Spring Break” recess and may be accessible in your local area. We encourage you to make a person visit as well as emailing.

Once at the Action Center you will find a pre-written comment letter ready for you to send to your elected officials. However, the Action Center does allow you to change and revise your comments before they are submitted—and we strongly urge you to do this. It always has a greater impact if you use your own words when providing your input to members of Congress. So please take a few minutes and “personalize” your comment letter.

Technical Assistance? If you have technical questions about using NAIFA’s Legislative Action Center, please contact Vicky Dobbin at 703-770-8113, or communications@naifa.org. If you have questions about the content, please contact Diane Boyle at 703-770-8252 or dboyle@naifa.org.

National Association of Insurance and Financial Advisors
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