Friday, August 05, 2005

The Classic Definition of Chutzpah...

Is the child who murders his parents, and then throws himself on the mercy of the court because he’s an orphan.
In today’s Dayton Daily News, there’s a story about a Cincinnati-area insurance agency that’s suing Anthem. Now, for those of us familiar with the recent shenanigans in which Anthem’s been involved (see here and here), this isn’t so surprising.
But what is surprising is why Total Benefits Planning Agency is suing them:
Apparently, TBPA put out a booklet called “How to Beat the High Cost of Health Care,” which advocated that employers should “shift certain employees 'away from the group policy' and replace their group coverage with individual policies.” I suspect that the primary reason that Anthem terminated their contract with TBPA has less to do with what TBPA advocated, and more with the very public way in which they did so. In other words, “don’t make waves.”
According to TBPA, their plan resulted in substantial savings for their clients. Other agents, however, took a dim view of this technique, citing the potential for adverse selection (that is, when the healthiest members of a group opt out, leaving only the sickest).
In any case, Anthem “pulled their ticket,” and TBPA is suing; I suppose for “damages” and for reinstatement.
The reason I find this so amusing is threefold: First, I teach Continuing Education classes in Cincinnati, so I know some of the players involved. The Cincinnati market is highly competitive, but in a particularly friendly way. So I find it somewhat amusing to see insurance folks sniping at each other in the local paper.
Second, I haven’t actually pulled out my most recent Anthem contract, but I presume it says what every other such contract says: this is an “at will” agreement, and can be cancelled at any time, for pretty much any reason, by either party, as long as proper notice (30 days IIRC) is given. Thus, we are both free to walk away, no harm and no foul. It’s also hard to see how TBPA can seriously argue that the termination “is denying consumers the right to explore alternative health care options." Last I looked, there were dozens and dozens of insurance carriers vying for business in the Cincinnati market.
Third, the underlying “tension” here is just plain silly: If the story is accurate (which I’ll assume it is) then TBPA was doing nothing particularly either controversial or unusual. With the proliferation of EOP’s (Employee Only Plans), cafeteria plans, carve-out scenarios and the like, there is no “there, there.” Heck, we’ve even had posts on this blog where we deleted the group coverage altogether, and substituted individual plans.
In the words of the Bard, this appears to be “Much Ado About Nothing.” And yet, it is obviously serious business: there’s a lawsuit. As a rule, I tend to side with fellow agents on issues regarding insurer behavior, but this one looks to me like a lot of smoke, and very little fire.
Still, it’s instructive in this sense: there are agents out there that do try to think “outside the box” on their clients’ behalf. It’s very easy to just quote the generic, cookie-cutter way: “Sure, Mrs Smith, we’ve got the $20 co-pay and $10 drug card benefit.” But as agents, we really need to be more creative, and really start talking more about alternatives such as HSA’s, and layering coverages.
Most clients would respect that, and most clients should expect that.
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