BY JOHN NELSON
The pandemic has revealed a lot about the world, our business, our society and, oh yeah, the state of humankind. I never anticipated I’d ever say this in 2018 but there’s no doubt in my mind that everyone reading this knows someone close to them who has contracted the virus. My heart goes out to those of you who suffered a loss from COVID-19.
The good, the bad, the tragic and the lessons learned
In this article, I’m going to be sharing my perspective on how our industry has done over the last two years. I’m going to focus on the good, bad and the tragic and the lessons learned. First, let’s talk about the health insurance industry here and “the good.” I’ll never forget when the lockdowns first started. I remember being more than a little worried about what closing businesses would mean for retention. When talking to colleagues at carriers and agents, forecasting a 20-25% hit in retention was commonplace. We thought we would see a 10% drop in the number of employers offering coverage and with the remaining employers an overall drop of 10% in employees. I remember talking to agents who were wondering if they were going to have any clients left by year’s end.
Fortunately, this precipitous drop never materialized. Retention was at an all time high. Hardly any small group clients dropped their coverage and to their immense credit, almost every employer kept their employees and families insured, regardless of whether they were working or not. Insurers also did herculean work. They allowed employers to keep their employees enrolled even though they were working less than the required hours. Many employees were allowed to remain covered even though they weren’t working, at all. Beyond that, some insurers even provided premium holidays enabling some employers to skip a premium payment. Everyone made a big effort to keep everybody insured.
As an aside and of particular note, despite the apprehension agents had about their own practices, you all were on the phones helping your clients and their loved ones through the worst of times. In my opinion, the insurers and agents really stepped up and enabled our clients to have at least a little piece of mind via the knowledge that at least their health coverage was still intact.
On the flip side (“the bad”), there were the restaurants, hospitality and other industries that got hit hard. A lot of them went out of business. Every day, there’d be a multitude of news reports about these closures. We could see it ourselves, right? Our favorite eateries were closed. All of them. And yet, as described above, our retention was at an all-time high. Why the contradiction? It’s because these industries, for the most part, don’t offer their employees health insurance. We didn’t see a drop-in retention because we never had them as clients in the first place.
Businesses in the service sector got hit hard by the pandemic and the human cost for not having the level of coverage that we are used to providing our clients was significant. Remember, the type of health coverage you have dictates the level of access to care you can get. Better benefits translate to more comprehensive networks and more accessible providers. Substandard coverage yields the opposite.
This leads us to a discussion about “the tragic.” The pandemic hit those who are most vulnerable in our society. Those who had resources (money) did comparatively well during the pandemic. Those who didn’t, suffered a lot. By way of example, let’s chat about New York City (NYC).
Per the New York Times in a mid-2020 article, three-quarters of the 33,000 COVID-related deaths in NYC occurred in public hospitals that primarily serve the under and uninsured populations. The mortality at public hospitals was disproportionately higher than in private hospitals. For example, mortality at NYC’s Langone hospital (private) was 11%. Yet, mortality at Coney Island (public) was about 40%! Why the disparity? A lot had to do with resources. For example, in private hospitals, there were roughly 3-4 patients for every nurse. In public hospitals, the number of patients to nurses was 20 to 1. This matters a lot when you’re talking about COVID-19 because of the need for ventilators. They require constant monitoring. If a patient wakes up from an induced coma, a nurse needs to be ready to be there to respond. When they’re not, tragedy can strike. A lot of COVID-19 patients in public hospitals died simply by awakening, unplugging themselves from their support devices and dying while trying to reach the bathroom.
THE REALITY: NO MONEY, NO COVERAGE, NO CARE
The point of all this is that most of our customers have resources to buy health insurance. But there’s a population of about 90 million people who are not even prospects for the coverage we sell because they can’t afford it. I think we as an industry of agents tend to forget this and that’s understandable. We all have our day jobs and families to support. Retention is up and it’s hard to ignore the benefits of that. But there’s another world of hurt out there that is not always visible to us. And we need to understand this. Not having access to good coverage affects the type of care people get. This is an argument that proponents for a Single Payer solution make.
THE ROLE OF SOCIAL DETERMINANTS
But it’s more complicated than that. It’s not as simple as giving everyone good coverage. Social determinants also weigh heavily on health outcomes. Ready transportation, decent housing, education, mental health, proper nourishment, are all just as important.
To address this, a number of years ago, a hospital somewhere on the east coast provided air conditioning to low income housing residents, dramatically lowering the admittance rate for asthmatics. Kaiser Permanente recently helped house the homeless in Oakland. It was more effective and less expensive doing that than it was treating them for exposure and other environmental issues in their hospital. Humana provides one of its insureds in Florida transportation to and from her church. She simply wants to be with her friends and their comradery but doesn’t have the personal means to get there.
Better to provide her that and give her a purpose in life rather than pay for the expensive medical and emotional consequences of lonely depression.
History will no doubt look upon the pandemic as the cause for a lot of changes in our country such as how and where we work, what’s really important and what’s really not. Who did well and who suffered the most. COVID-19 has shown a bright light on our society like never before.
The question for us as an industry is how do we help those who need it the most? Understand what’s going on outside our world. Read up on these things. For example, you might discover that COVID-19-related admissions are up for certain hospitals rather than others. And then talk about this. Not just with colleagues, but family and friends, too. It’s a very complicated set of issues but one that is more than worthy of the challenge.
JOHN NELSON is co-chief executive officer of Warner Pacific Insurance Services, one of the nation’s largest health insurance general agencies serving over 50,000 small employers.
John has long been a champion for the brokerage industry and fuels Warner’s mission of making health coverage accessible to all. John’s known for his legislative and educational efforts in the brokerage and health insurance industries. He has also been an adviser and friend to industry leaders, business groups and consumers and has had a hand in educating thousands of health insurance professionals.
John is a past president of the National Association of Health Underwriters and currently serves
as a member of the Council of Employee Benefits Executives’ advisory committee.
John earned a Bachelor of Arts degree in Economics from UCLA and was bestowed a Chancellor’s Marshall Award for service to the university.