Sunday, March 22, 2015

Uneven Playing Field

Even before Obamacare limped out of the gate in October, 2013, I was concerned about the uneven playing field and competing with the likes of the federal government while trying to build and even maintain a client base.

In essence, agents like myself who have devoted years (40 in my case) to studying the health insurance industry, designing and implementing plans to deliver the most value to our clients, would now have to compete with the government. To make matters worse, we are taxpayers funding our own competitors.

But going beyond what may be perceived as selfish motivation, there is also a concern for the lack of informed advice available to the consumer that dialogues with a navigator who has barely a few weeks of training (if that) buys through the exchange. What kind of counsel are they getting? Do the navigators understand the nuances of a PPO plan vs. HMO? And what about drug formularies?


Their job is to direct you to the lowest cost plan for your area and service after the sale is non-existent.

David vs Goliath
Back to the original topic, how is the agent to compete against the federal government with a limitless budget and the ability to blow $700 million on a website that still doesn't work properly? On top of that, all the proclamations from the president on down as well as media reports never mention buying coverage through an agent. It is all directed at the dysfunctional and staff enrollers paid to guide you to the lowest cost plan based on your guesstimate of future earnings.

Sounds like a perfect storm.

The country's largest health insurance agency, eHealthinsurance, is having trouble coping with this brave new Obamacare world. For all the talk about how many MORE people would buy health insurance one would think insurance agents and places like eHealthinsurance would be in a profitable growth mode.

Not so.
Obamacare is only its second year of enrollment, but Uncle Sam has already sidelined eHealth, which has announced that it will lay off 15 percent of its workforce and take a restructuring charge of up to $4.7 million dollars. - Forbes
The first full year of Obamacare in all its' glory created a low and RIF for eHealthinsurance.

So, 160 eHealth employees will lose their jobs. That does not seem like much, compared to the overall reduction of 2.5 million jobs lost due to Obamacare by 2017. Still, they are jobs that would not disappear, if the government had simply allowed eHealth to compete. Instead, the government used taxpayers’ money to compete against eHealth, both directly and by subsidizing state exchanges.
Read that again and notice the observations regarding employment.

The White House likes to talk about job growth and lower unemployment yet Forbes has the gall to challenge those statements.

Game changer
While some may slough off those numbers, the frightening part to someone with a Libertarian view is this. Anyone in the health insurance business before 2014 suddenly found themselves in direct competition with the federal government. Taxpayer dollars were used, not for the national defense, not for social welfare programs but to compete head to head with business owners.

This has ramifications that go beyond health insurance.

If the government can and will create an entirely new market while implementing laws designed to destroy an existing industry and at the same time build a new delivery system to compete with business owners, what is to stop them from duplicating this process for other industries?

What's next?
What if they decide to tell the news media what they can and cannot report and then create a Soviet style organization that delivers information to the public?

Or maybe the government decides to issue rules governing the internet and use that power to suppress free speech?

A government that could do that could also make it illegal for citizens to own firearms or say you can own a gun but you can't buy bullets.

Business owners have to deal with challenges every day and competition is a fact of life. You can say it is unfair for the mom and pop hardware store that has to compete with Home Depot, or the family department store that now finds themselves challenged when Wal-Mart comes to town.

But when entrepreneurs find the rules of engagement changed in such a way as to limit what they can offer to the public, laws that dictate when their product can be sold and when it must be shelved and then on top of all that they must compete against a taxpayer funded entity, what happens?

Where does it all stop? What will be the next industry targeted for extinction by the power of the federal government?

Industrialist Henry Ford is quoted as saying, "Any man who thinks he can be happy and prosperous by letting the government take care of him, better take a closer look at the American Indian” 

A lot of truth in that.

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