Broker and agent organizations see opportunity in Trump presidency
Republicans’ dominance in Tuesday’s election represents “a light at the end of the tunnel” for agents and brokers who felt they were hamstrung by a lack of political options to tackle rising healthcare costs, says Ronnell Nolan, president & CEO of Health Agents for America.
“This totally changes the ballgame because now we have new, fresh eyes looking at possible new legislation, and hopefully agents and brokers will be at the table,” she says. “I don’t think they were firmly there in the conception of the ACA.”
When the Trump administration tackles a repeal and replacement plan for the Affordable Care Act, as the President-elect has promised to do, the value of advisers will continue to increase as the country navigates further change to the healthcare system, says Mark Gaunya, co-owner and chief innovation officer at Borislow Insurance in Methuen, Mass.
“If you can provide thought leadership and strategy you’ll always be a valuable member of your client’s team,” says Gaunya.
Nolan and other broker lobbying organizations are nurturing existing relationships on Capitol Hill to ensure advisers have a place at the table in any new healthcare legislation discussions. “We hope that [the next Congress is] a little bit friendlier to the agent/broker community, understands what role we play and allows us to come to the table a lot quicker,” she says.
Items on the congressional agenda include revisiting how agent commissions are calculated in the ACA’s medical loss ratio provision — but that is contingent on how the Trump administration wants to approach changing healthcare reform, says Diane Boyle, senior vice president of government relations at the National Association of Insurance & Financial Advisors.
“I would hope that the MLR would be one of those provisions that could be phased out without disruption of the overall repeal and replacement plan,” she says.
However, with a full repeal on the minds of the Republican-controlled House and Senate, “I think the challenge there is going to be a resistance to make minor adjustments,” Boyle adds.
Nolan is confident the MLR will go away one way or another, but the issue of commission payment will still be on the table if costs are not under control, she says. “That still brings the question to insurance companies saying, ‘We’re not going to pay you commissions regardless of the MLR or not if we’re not making money,’” she says.
Joel Kopperud, vice president of government affairs at the Council of Insurance Agents & Brokers, is looking at an even bigger threat: the future of the employer-based health insurance system overall.
“I imagine that Paul Ryan and [Ways and Means Committee] Chairman Brady and leaders on the Hill will have a heavy hand in writing what the repeal would look like,” Kopperud says, “and if that’s the case they’ll probably start tinkering with the tax exclusion for employer-provided plans. That’s a threat to us.”
It’s likely Trump will work with Congress to act quickly, says Nathan Riedel, vice president, political affairs at Independent Insurance Agents & Brokers of America. “A Trump administration would be under a ton of pressure to unwind the Affordable Care Act,” Riedel says. “Much of his closing argument focused on the 25% premium increase to those on the exchange and general dysfunction of the law. His electorate will not let him forget that promise.”
Even so, a complete repeal effort would not realistically go into effect immediately, as it would take time to dismantle a program that covers millions of Americans, adds NAIFA’s Boyle. “It would have to be phased in in some capacity,” she says. “There may be an interest in dropping some of the provisions within that first year so that those changes could be recognized immediately or you’re not going to be able to price product if you’re completely repealing the ACA and eliminating the exchanges that are set up. Then those states that have their own exchanges are going to need to change their state laws as well.”
Also see: "Who will lead the charge for Trumpcare?"
For now, though, the ACA is intact, and advisers should act as if it is remaining so, says HAFA’s Nolan. “We have to advise our clients with the law like it is today. It might be 2018, 2019 before anything really goes into place,” she says. “Until something is changed, we have to continue to take care of our clients as if the ACA continues to be the current law.”
Meanwhile, it’s about keeping the employer-based system stable, says Janet Trautwein, executive vice president and CEO of the National Association of Health Underwriters. “We’re encouraged that now that the election has passed, we can get back to making sure we are doing everything we can to stabilize the health insurance market and improve health plan affordability and availability as well as the optimal conditions under which the market has been operating for our members and their clients,” she says.
However, Trautwein adds, “There will be no magic bullet.”
Employer market stability
For lobbyists like CIAB’s Kopperud, Trump’s presidency represents “more of an uphill battle just because there’s no predictability,” he says, “and there’s a stronger voice given to the far right who don’t necessarily think an employer-provided tax exclusion is the way to go.”
Gaunya agrees that preserving the tax exclusion must be a top priority. “I think ESI [employer-sponsored insurance] needs to stay in place and frankly if it weren’t it would be the single largest tax increase for the middle class, ever,” he says.
Trautwein assured NAHU will work with the new administration and Congress to advance adviser interests. “It will be important for everyone to work together to make the changes we can make in the environment we now have,” she says. “NAHU’s commitment to the private health insurance market and the important role our members play in that market remains strong, as does our stature and influence as an association to create change that will make a difference.”
It won’t be a straight path, but NAIFA’s Boyle agrees that broker agency commitment is strong across the organizations. “I think we’re going to have some opportunities and we’re going to have some challenges with this effort as it moves forward and I think you’re going to see the industry align,” she says. “The agent groups, as we’ve done before, will need to talk and make sure that we’re working together and singing off the same song sheet.”