Health Insurance and the Elections
By Kate Kinkade, CLU, ChFC

At press time, more than 34 presidential primaries or caucuses will have taken place and the front-runners for the Republican and Democratic nomination for president will most likely be identified. While those results are not clear at the time of this writing, what is clear is that health insurance is part of the national debate and will be affected by the election.

Eight candidates have proposed plans for the direction of health insurance in the United States. Most proposals fall into one of two categories; focus on tax incentives for the purchase of individual insurance, championed by predominately-Republican candidates, and provide an expanded private/public group insurance with shared financing responsibilities. All three Democratic front-runners, Clinton, Obama, and Edwards have proposed plans for universal coverage in this category. These plans are similar to the new Massachusetts universal coverage call and California Governor Schwarzenegger’s proposals.

Only one presidential candidate, Democrat Dennis Kucinich, has proposed universal coverage through a public insurance program. The fact that only Kucinich is promoting a “single payor” system speaks volumes about the effectiveness of the insurance industry’s efforts, over the last decade, to narrow the debate to alternatives that include the private sector in financing health coverage.

The goal of all Democratic candidates is to expand private and public healthcare systems to provide universal coverage, but there are so many issues involved that the effect on the insurance markets is unclear. The Democrats see a health insurance system based primarily on broad private and public group risk pools with regulations that prevent insurers from selecting against individuals with health risks. Since much of the increased financing for this system would come from state and federal governments and employers, the pressures on profitability in private insurance may be significant and may influence a trend toward public group pools.

The Republican proposals do not hold out universal coverage as a goal, but rely nearly exclusively on individual insurance markets and tax incentives, with the caveat that insurers would be forced to cover anyone who applies and would not be able to charge premiums based on risk or age. Such a plan may protect the role of private insurance and avoid tax increases. But, since it also seems bound to increase premiums, it may not address the healthcare financing issue, which has become a primary domestic concern of voters.

Private health insurance will continue to be part of the financing of healthcare in the near future. But there is no question that the current system will change. If it does not change because of the 2008 elections, it will change in two to four years if the problem remains unsolved. The number of Americans without health insurance continues to rise, increasing by 8.6 million in the past six years, according to the Commonwealth Fund. The number of underinsured is just as significant.

The role of the health insurance agent, as an advisor and purveyor of private insurance, should remain key to helping employers and individual consumers make good decisions. Health insurance agents have been in front of this debate for years; promoting solutions that work for their clients. The many professionals who help employers and individuals make health insurance decisions are sure to be more needed than ever as systems change. Their exact role and form of compensation may change, but if they continue to have the best interest of the consumer as their primary goal, they are likely to have an important role in whatever the evolution of healthcare financing brings.