Dispelling Some Health Reform Myths
by Paul Markovich and Karen Vigil

As of this writing, the healthcare-reform debate in Sacramento is entering its final stages, and it’s anyone’s guess as to how it will all come out. But one thing that’s certain is that many of the arguments against expanding health coverage are more myth than fact.
      Let’s look at three of these myths to underline a critical point–if healthcare reform is done right, it will reinforce the critical role that brokers and consultants play in helping individuals, and employers make complicated coverage decisions. Trying to implement reform without involving the producer community simply will not work.

Myth #1: Universal-Coverage = Government-Run Healthcare

Critics of coverage expansion raise the specter of “socialized medicine,” but the reality is that the leading universal coverage proposals build on the things that work best in the private sector. Most publicly funded coverage for low-income Californians is delivered by private health plans today and that wouldn’t change. Under the proposed reforms, government would also subsidize private coverage for those who can’t afford to pay the full price on their own.
      The reform model proposed by Governor Schwarzenegger and favored by the leading Democratic presidential candidates achieves universal coverage through a combination of requirements on employers and individuals, plus an expansion of public programs for those on the lower end of the income scale. This would not reduce consumer choices or take people out of the private insurance market. In fact, it would enable millions of new customers to get private coverage.

Myth #2: Individual-Mandates Can’t Work

The governor’s plan includes an individual mandate, which requires everyone who does not receive health coverage from their employer or their government to get it on their own. The California Association of Health Underwriters has also proposed a system of universal coverage based on an individual mandate. Some opponents of this approach say that these mandates can’t be enforced. They point to the fact that a significant number of drivers do not have auto insurance even though they are required to do so.
      But auto and health insurance are very different. There are no federal auto-insurance programs nor are there state subsidies for auto insurance. In all of the universal coverage proposals, those at the bottom of the income ladder can receive coverage through government programs and many who make too much to qualify for public programs will be eligible for subsidies to help them purchase private coverage.
      We agree that simply passing a law requiring people to have coverage is not enough. Individuals and employers who haven’t purchased insurance before will have to face a series of complex choices and they’ll need guidance. The state’s primary responsibility is enforcing the mandate, but California’s network of expert brokers will guide consumers and employers through the sometimes tangled web of options available to them. Recognizing this, policymakers should not artificially limit the incentives offered to brokers for playing this critical role.

Myth #3: Universal Coverage Will Eliminate Brokers’ Role

If this were true, reform couldn’t possibly work. Brokers will be more important than ever in an expanding market of people who have never purchased insurance. Imagine that you’re one of the nearly 7 million Californians without coverage who will need to get it if an individual mandate became law.
      You would need to know where your income stood in relation to the federal poverty threshold, whether your employer was covered by the “pay or play” requirement and which option it was choosing. You would also need to figure out which level of coverage is best suited for you and your family’s needs.
      The state will provide some information about insurance options, but most purchasers will continue to rely on our state’s network of nearly 2,500 licensed brokers. The state’s healthcare bureaucracy does not have the kind of Main street presence in communities. It does not have experience in helping people choose from competing options to make the transition to a universal system work smoothly.
      Of course, private businesses aren’t going to perform this public service without appropriate incentives and assistance. Policymakers must consider this as they draw up plans to cover all Californians.
      We can achieve universal coverage within the framework of our private healthcare system and we’re working to make sure that any new law recognizes the critical work that brokers do for their clients.
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Paul Markovich is senior vice president and chief executive officer of Blue Shield of California’s Large Group Business Unit. Karen Vigil is senior vice president and chief executive officer of Blue Shield of California’s Individual, Small Group, and Government Business Unit.