Reforming Medicaid

By Greg Scandlen

Fully one-half of the supposed newly insured in ObamaCare will be covered by expanded Medicaid – if all goes according to plan.

Now, I will wager my retirement fund that nowhere near the 32 million estimated will ever be covered. In fact, I would be astonished if even one-third of that number get coverage, and it is as likely that ObamaCare will result in fewer people covered, not more.

But since so much is riding on Medicaid, it might have been a good idea to think through whether Medicaid is such a good vehicle for expanding coverage in the first place. There is evidence aplenty that when it comes to health outcomes, it is better to be uninsured than to be on Medicaid.

Still, with or without Obamacare, Medicaid is a gigantic program – bigger than Medicare in numbers of people covered. And it is helping to drive the states into bankruptcy. So an examination of what to do with it is well overdue.

Recently there has been some fine work done on the topic.  One example is a fine paper published by the Texas Public Policy Foundation and authored by state representative Arlene Wohlgemuth, Brittani Miller, and Spencer Harris, “Medicaid Reform: Constructive Alternatives to a Failed Program.”

The authors propose creation of an entirely new approach, TexHealth. They write:

TexHealth would change the dynamic of Medicaid from a defined benefit program to a defined contribution program, allowing individuals to make their own decisions in regards to their health insurance needs.

They explain:

Under a defined contribution plan, TexHealth will provide better access to health care services and be available to potentially 4 million more individuals than currently served, for less money. Initially, the state would spend $22.26 billion per biennium in subsidies to low-income Texans, $12.4 billion on long-term services and support, and $9.22 billion for implementation and administration, totaling 5 percent less than the state spent on Medicaid in the 2008-2009 biennium. TexHealth strives to offer the maximum amount of choice and freedom in health insurance decisions.

The paper is quite comprehensive and includes summaries of the handful of successful Medicaid reforms that have been implemented to date, including Rhode Island’s Global Medicaid Waiver, Indiana’s Healthy Indiana Plan, and Florida’s Cash & Counseling program.

In North Carolina the John Locke Foundation published a short paper by Nicole Fisher and Joseph Coletti on “Repair and Reform Medicaid.” The paper finds that enrollment n North Carolina’s Medicaid program grew from 639,000 people in 1990 to 1,603,000 in 2006. And the benefits are among the most generous in the Southeast with a per-enrollee cost of $5,668. The future is not bright. The paper says:

ObamaCare will make it nearly impossible for states to make economic reductions to Medicaid due to requirements of maintaining high eligibility while imposing new costly provisions beginning in 2014. Secretary of Health and Human Services Kathleen Sebelius has been all but intractable regarding state requests for flexibility of plan design and payments to providers.

The paper calls for restructuring the long term care component, reducing optional services, and applying for block grant funding similar to what Rhode Island did.

In Wisconsin, the new Secretary of Health Services, Dennis Smith, is doing some similar thinking.

An article by Guy Boulton in the Journal Sentinel reports:

Dennis Smith’s first task as secretary of the Department of Health Services is to eliminate a roughly $500 million shortfall in the state budget for the BadgerCare Plus and Medicaid programs. But his ultimate goal is to make the programs more efficient.

The article explains that Governor Scott Walker’s budget actually increases Medicaid spending by $1.3 billion over the next two years to replace lost stimulus money.

Mr. Smith is taking his time to “get input from the stakeholders,” and, “some advocates are wary.” But, “the Legislature also gave the Walker administration more freedom to remake the Medicaid and BadgerCare Plus programs; that was written into the controversial measure that cut collective-bargaining powers for public-sector unions.”

The article continues:

Smith is open to setting up some version of health savings accounts for people in BadgerCare Plus and other programs. And he talks about providing defined benefits and services for specific groups within the programs. “We don’t need more money,” he said. “We need to use the dollars more wisely.” Much of those dollars are spent on a relatively small number of people, nearly all of them elderly or disabled and many covered by both Medicare and Medicaid. Smith noted that 5% of the people covered by Medicaid account for 58% of the cost, a bit more than the national average of 54%. Long-term care is among areas likely to be a focus. He admires what Oregon and Washington have done to provide community-based  are, enabling people to remain in their homes instead of nursing homes while also saving money.

These state efforts are getting a boost from Congress. The Wall Street Journal reports:

House Republicans are preparing to propose a major shake-up of the Medicaid health-care program for the poor, a first step in their drive to overhaul federal entitlements, according to a member of the House Budget Committee.

Entitlement reform will be part of the 2012 budget proposal that Paul Ryan will be unveiling in April, but there is some talk about beginning with the remaining FY 2011 budget.  Block grants to the states are a popular idea. That would enable the states maximum flexibility to design a wholly new approach to covering the poor. Of course, they had that flexibility with the SCHIP program and didn’t do much with it.

At a minimum, the states should separate out the three programs that constitute Medicaid – long term care for the elderly, health coverage for the disabled, and health coverage for low-income families. These three components have little in common and having them merged makes it difficult to even talk about how much Medicaid costs. Total program costs are meaningless when looking at reform.

But the states need to do much more, including voucherizing Medicaid for most eligible families. A recent study in Health Affairs found that such families are constantly moving in and out of Medicaid eligibility, even at a 133% of poverty cut off point. This is disruptive and confusing for such families. It would be far better if they could apply Medicaid funds to the cost of private coverage they could keep as circumstances change.

At the same time, some significant portion of the population is incapable of managing any form of insurance program. They may be illiterate, drug addicted, mentally ill, or otherwise too dysfunctional to make appointments, fill prescriptions, and follow treatment plans. These people need the direct delivery of services.

Getting Medicaid right is not easy, but the stakes are enormous. We need to get serious about it.

HSA Roundup

By Greg Scandlen

Fidelity Investments reports substantial growth in its HSA business. In 2010 it added 14 new corporate and 22,000 individual clients, representing a one-year growth rate of 52%. As of February 28, 2011, it held $229 million in HSA assets.

The company found that 17% of its account holders contributed more than $5,000 to their accounts in 2010, and 46% contributed between $2,500 and $5,000. Ninety-five percent carried over a balance from year to year.

Fidelity Press Release

State employees in Wisconsin will likely be put into HSAs as a result of the new budget-repair law.  Currently, 95% of state workers have no deductible whatsoever with the remaining 5% having a deductible of $100.  The average private sector deductible in Wisconsin is $947 for singles and $1,893 for families.  The new law requires the state to do a study by June, 2012, that will likely result in changes in 2013.

Wisconsin Journal Sentinel

Towers Watson conducted an employer survey on behalf of the National Business Group on Health that found, according to an article in HRMorning:

Account-based health plans (ABHPs) — health savings accounts (HSAs) and health reimbursement arrangements (HRAs) are booming, the report said. In 2002, just 2% of all employers offered ABHPs, but by 2011, that number has exploded to 53%. By 2012, another 13% of all respondents plan to add an ABHP.

HR Morning

The Employee Benefit Research Institute (EBRI) put out a new study of HSA and HRA accounts, which, as usual with EBRI, underestimates the market penetration of HSAs. I write this up on the NCPA Blog. EBRI draws its conclusions on total deposits and account growth from an internet survey, while Bill Boyles of the Consumer Driven Market Report (CDMR), and Eric Remjeske of Devenir Investments each tallied similar data by talking to HSA administrators who actually know how much money is in their vaults.

The contrast should be embarrassing to EBRI – if it were capable of being embarrassed.

NCPA’s Health Policy Blog

Mandate Still Not Popular

By Greg Scandlen

A new survey by Harris Interactive finds that the individual mandate is still a loser – only 23% of respondents support it, while 50% oppose it.

Humphrey Taylor, the chairman of the Harris Poll, still tries to spin the results in the most favorable (to Obama) light.  The company press release says:

But certain arguments in favor of the mandate seem to sway opinion back toward support of the measure. For example, 71 percent of the more than 3,000 adults polled in mid-February agreed with the notion that “for health insurance to work, it is necessary to include people who are healthy in order to help pay for those who are sick.”

That seems to suggest that “while the individual mandate is still widely unpopular, indeed by far the most unpopular part of the Affordable Care Act [ACA], some arguments in favor of it are supported by most people,” said Humphrey Taylor, chairman of The Harris Poll Interactive.

No, Mr. Taylor’s conclusion does not follow from the statement above. The statement is absolutely true — “for health insurance to work, it is necessary to include people who are healthy in order to help pay for those who are sick.”  — but that has no bearing whatsoever on the mandate.

Every insurance pool has a mix of many healthy people and a few sick people.  That has always been and always will be the case. No one has to mandate anything for that to happen.

Unlike Mr. Taylor, most Americans are full of good sense. They know that it is good to be insured so that they will be covered when they need it. As with all insurance, we are much happier if we don’t have to use it, but we appreciate the security of having it, just in case.

We have never needed to be mandated to buy it. Even now, only some 15% of the population is uninsured. Pretty good considering how expensive and bureaucratic it is. Make it less expensive and bureaucratic and a whole lot more people will buy it.

By the way, the poll also found only 20% think the law is constitutional, while 50% think it is not.


Right of Contract

By Greg Scandlen

We have learned a lot recently about the Commerce Clause and the transformation that took place in the Roosevelt-era Supreme Court from 1937 to 1945.

Never mind the principal of “stare decisis” that says the courts should respect and uphold previous decisions of the Court. That only seems to apply when there is a conservative nominee who might change the interpretations of previous progressive justices.

When a radical Leftist judge throws out 200 years of established precedent, he (or she) is just enlightened. Once the new radical interpretation has been made, God help any judge who might think it was poorly decided.

Now Reason Magazine reminds us of a similar radical change the Court imposed in 1937 – the complete abandonment of the fundamental and ancient principle of freedom of contract. This says that when two people willingly enter into a voluntary contract, the government’s only role is to enforce the terms of the contract.

In the Reason article Brian Doherty quotes David Mayer’s new book, “Liberty of Contract: Rediscovering a Lost Constitutional Right,” describing the right of contract as:

… a fundamental right, one aspect of the basic right to liberty safeguarded under the Constitution’s due process clauses, which prohibit government—the federal government, under the Fifth Amendment, and states, under the Fourteenth Amendment –from depriving persons of ‘life, liberty, or property without due process of law’…[but] following its ‘New Deal Revolution’ of 1937, it ceased protecting liberty of contract.

In an interview, Mayer explains that prior to 1937 the Court overturned a large number of laws involving such topics as minimum wage, state segregation laws, and laws requiring public school attendance and prohibiting parochial schools. These were tossed, not because the Court found the laws distasteful, but because they violated the freedom of contract.

Mayer argues that the current affection by the courts for “privacy” is too narrow and should really be expanded to freedom of contract. He says,

(T)he modern court’s protection of privacy rights from a libertarian perspective is too narrowly focused on issues about procreation and love. Why is it not equally fundamental to decide how many hours we work or our wage levels? There are all sorts of government regulation of our lives [in the world of business and economics] that interfere with the right to privacy too.

Certainly the current raft of suits over ObamaCare should include a freedom of contract argument. Why should I not be allowed to freely enter into a contract with an insurance company to provide the benefits of my choosing in exchange for willingly paying the premiums it requires.

How is that arrangement any business of the government?

Is the Mandate Really “Essential?”

By Greg Scandlen

A recent column by George Will brought to my attention a new paper by Mark Hall on the constitutionality of the individual mandate in the University of Pennsylvania Law Review.

Will does a nice job of rebutting Hall’s central argument, by writing:

Mark Hall of Wake Forest University, in an article for the University of Pennsylvania Law Review, says there would be constitutional “uncertainty over the mandate in isolation.” But it is “inextricably intertwined” with Obamacare’s “other insurance regulations” — e.g., those pertaining to preexisting conditions — “which indisputably are constitutional.” So the “strongest defense” of Congress’s power to enact the mandate is “the acknowledged undesirability, if not impossibility” of the regulations regarding preexisting conditions, absent the mandate.

Hall says that the mandate “meets a high threshold of necessity to accomplish the overall reform scheme, clearly within congressional power, to create a market structure in which no one is ever again medically uninsurable.” But unless we postulate that Congress has whatever power is required to create such a market structure, this question remains: Does the fact that Congress has the constitutional power to do X — say, guarantee universal access to insurance — make Y constitutional merely because Y is necessary for doing X?

Congress has the constitutional power to combat political corruption, the “appearance” thereof and the “circumvention” of laws for this purpose. But suppose Congress, exercising this power by regulating campaign finances, decides that abridging freedom of speech is necessary for its anti-corruption measures. This necessity, defined by this preference, does not make such abridgement constitutional. The Supreme Court said as much concerning McCain-Feingold.

That is fine as far as it goes, but I want to make a different point – is the mandate really “essential” to the other insurance “reforms” in the bill? The Obama Administration and it supporters certainly argue that it is, but we have seen that this administration never lets evidence stand in the way of their political ambitions.

In fact, there is plenty of real-world evidence that contradicts the argument. These are the insurance markets in New Jersey, New York and several other states that have adopted community rating and guaranteed issue in their insurance markets.

It is true that those provisions create their own problems, but health insurance continues to be available in those states, even without a mandate to purchase. Ipso Facto – a mandate is not “essential” to the workings of community rating and guaranteed issue.  Case closed.

Yes, these provisions create problems, especially that costs rise dramatically. But the mandate itself also causes problems. So whatever is done by the regulators will not be problem-free. Congress has chosen a set of policies that will aggravate these problems. That Congress has chosen one set of problems over another set of problems hardly supports the idea that it can therefore violate the Constitution.

But there are several other ideas in Hall’s paper I want to address. These are found in the first few paragraphs of his paper, which are rife with fuzzy thinking.

He writes:

Congress clearly  would  have  authority,  if  it  wanted,  to  enact  a   single-payer socialized insurance system, using its power to tax and spend “for the general welfare.”

Yes, indeed, it could do that. Why did it not? Because there is no political support for such a program. It decided instead to hide its intentions behind a façade of illusions. This dishonesty hardly supports the constitutionality of its actions.

Hall also writes:

The idea for an individual mandate originated from Republican lawmakers, who never questioned its constitutionality until now.

This is a peculiar argument that says more about Mr. Hall’s political orientation than about any substantive arguments. Mr. Hall seems to believe that all Republicans are required to think alike.  His support for the notion comes from a bill that was introduced in 1993 and an op-ed by Bill Frist from 2009. From that, he concludes that no Republican has ever questioned the constitutionality of an individual mandate.

He continues:

… considering the well-understood economics of health insurance, a mandate to purchase insurance is obviously part and parcel of regulating how insurers design, price and sell their products.

We dealt with this above. Apparently, the “well understood economics” were not well understood by legislators in New Jersey, New York and all of the other states that routinely regulate “how insurers design, price and sell their products.” Indeed, while every state in the Union issues such regulations, only one (Massachusetts) has decided to mandate purchase.

So, the mandate is not “essential” to the regulations of the law, and the states have been issuing such regulations for half a century without mandating coverage, even though they, unlike Congress, are constitutionally able to do so.

Basic Health Plan – Another Complication

By Greg Scandlen

Whenever a new program is designed by a small group of ambitious policy wonks sitting around a table in Washington, you can bet it will be hopelessly complex.  Especially when their swell ideas are not even tested by two-party scrutiny, but are rammed through with a partisan majority.

This has perhaps never been better illustrated than by a provision that has entirely escaped scrutiny until now. This is the “Basic Health Program” (BHP) option that is part of ObamaCare. Don’t be surprised if you haven’t heard of this before. No one has. But thanks to a new paper by Stan Dorn of the Urban Institute and funded by the Robert Wood Johnson Foundation, you now have an opportunity to find out a lot about it – if you are feeling masochistic today.

The Basic Health Plan is sort of a “public option” in sheep’s clothing. As you know, ObamaCare will put everyone up to 133% of the federal poverty level in Medicaid, and it will offer the subsidized “insurance exchange” for everyone else who does not get employer-sponsored coverage.

In addition to all that, it creates a Basic Health Plan the states may implement to provide coverage for people between 133% and 200% of poverty and non-citizen legal immigrants who are not eligible for Medicaid. The paper doesn’t say how many people this might include, though it estimates it would cover two percent of the under-65 population.

If a state opts for a BHP, those people will no longer be eligible for coverage under the Exchange.  If the state decides to extend Medicaid coverage to this population, it will get a higher federal subsidy than it does under normal Medicaid, because the federal subsidy is based on the premiums in the Exchange, which pay providers 29% higher than Medicaid does and is therefore more costly on a per capita basis.

States may put BHP coverage out to bid, but only to managed care plans They must provide coverage that meets or exceeds the Exchange requirements for covered benefits and cost-sharing, and the private plan will be subject to an 85% loss ratio standard. That should be quite a trick, considering the small population involved and the extraordinary reporting required.

The paper lists five different approaches a state might use when designing a BHP program:

  • Create a whole new program.
  • Provide Expanded Medicaid.
  • Extend the existing CHIP program to adults.
  • Create an integrated single program for Medicaid, CHIP, and the BHP population, that varies in covered benefits, cost sharing and provider payments for the various populations.
  • Use BHP as a two-way bridge between Medicaid and Exchange coverage.

Whichever a state decides, there will be substantial development and administrative costs, which are not covered by federal funds.

The paper takes it on faith that cost-sharing of any kind is bad, so it touts reduced cost sharing as one of the advantages of the BHP program – it will be less than required under the Exchange. The paper notes that under the Exchanges premiums and “actuarial value” of coverage will vary by income, and offers this table as a reminder –

Poverty           Monthly          Actuarial Value

Level %          Premium        of Coverage

150                 $54.15             94%

175                 $81.34             87%

200                 $113.72          87%

225                 $145.70          73%

250                 $181.63          73%

Now you may wonder how in the world they can determine what the premiums will be years before the benefits have been defined and even longer before they have the least idea of how many people will enroll or how much services will be consumed.

Simple. Prices no longer have any meaning. The price of coverage will be whatever that table full of policy wonks says it will be. And people will pay according to how much sympathy the policy wonks have for their condition.

In this case, the paper notes that –

In the past, premium and OOP costs such as those imposed by ACA have deterred many low-income consumers from enrolling into coverage and from using necessary care, sometimes with adverse effects on health status.

Indeed, but of course the same thing could be said for Medicaid enrollment which is absolutely free of either premiums or cost-sharing. About one-third of the uninsured are already eligible for Medicaid, but haven’t enrolled. So, just maybe there is something going on other than fear of costs. But we wouldn’t want to confuse the wonks, would we?

Don’t Take the Bait

By Greg Scandlen

Now that ObamaCare is failing, the Democrats are trying to turn the argument around. “At least we tried,” they say, “what have the Republicans done?” Then they offer two options: 1. Let the states do their own thing, but only if they can cover as many people with as comprehensive benefits for less cost, or 2. Let the Republicans offer an equally comprehensive federal program.

Republicans should resist falling into that trap.

Democrats love to enact “comprehensive” programs that “guarantee” this, that, or the other. Problem is that the “guarantee” isn’t worth a bucket of warm spit.  The examples are legion and I won’t list them here. Let’s just say, the programs never help as many people as promised, never come in within budget, often make conditions worse for most people, and block market-based changes that might have actually worked.

After their programs have failed to do what they promised, the response is always, “Yes, but think how many people we’ve helped. If you take it away, those people will perish.”  Even the much-vaunted Medicare program is like that. Only about half the elderly needed help when it was enacted, but now 100% of the elderly are dependent on it. This dependency is a very big problem, and Republicans have a hard time dealing with it.

Writing in the Washington Post, Ezra Klein dares Republicans to “take a stand on health-care reform.”  He writes:

To understand the trouble the Republicans find themselves in, you need to understand the party’s history with health-care reform. For much of the 20th century, Democrats fought for a single-payer system, and Republicans countered with calls for an employer-based system. In February 1974, President Richard Nixon made it official. “Comprehensive health insurance is an idea whose time has come in America,” he said, announcing a plan in which “every employer would be required to offer all full-time employees the Comprehensive Health Insurance Plan.”

This is true, but Richard Nixon was hardly an advocate of market-based solutions. This is the same president who instituted wage and price controls for the entire economy in an effort to control inflation. It is Nixonian thinking that gets Republicans in trouble every time.

Many Republicans are still subject to this kind of thinking. Mitt Romney and the Heritage Foundation got RomneyCare enacted in Massachusetts, and even today Klein writes of the Wyden-Brown proposal to allow state waivers:

The law envisions the secretary of Health and Human Services handing out the waivers, while the Heritage Foundation’s Stuart Butler would prefer to see a bipartisan commission in charge.

Here is precisely the kind of Nixonian thinking that Stuart Butler is famous for – continue having Washington dictate the terms of surrender, but put decision-making in the hands of a commission of elites rather than the Secretary of HHS.

Look, let’s be honest, when you’re dealing with markets, you can’t make guarantees. All you can do is get the incentives right, and watch things unfold.  Most of the time entrepreneurs come up with ideas that no one ever considered before. They can’t prove the merit of the idea ahead of time, and many ideas will fail. But the ones that succeed will add tremendous value and productivity, beyond all expectations.

It is amazing that we should even have to make this argument in these days of explosive innovation.  Think of all the efforts that were going into Internet search engines just ten years ago before Google came along. Think of Apple with and without Steve Jobs.

The main thing we have to do to reform health care is get the rusty old bureaucracy out of the way, and enable innovators and creators to operate with maximum freedom. It can’t be dictated by the Secretary of HHS or by a bipartisan commission, either.

How can we present this vision in a politically palatable way? Ezra Klein will never be convinced, and neither will Stuart Butler, but most of America knows instinctively that health care is still in the horse and buggy stage and we are well overdue for explosive innovation.

The last thing Republicans should do is try to find a better way of making buggy whips.



President Obama, The Worst Salesman in America

By Ross Schriftman, RHU, LUTCF, ACBC, MSAA

It is remarkable that someone who ran such a successful campaign to be elected President is such a poor salesman when it comes to promoting his policies.  Barrack Obama’s 2008 election campaign was brilliantly executed.  His ability to inspire support for his agenda is abysmal.

The reason is obvious. He really does not understand what sales is all about.  He uses the worst tactics; the ones that give all Americans who sell for a living a bad reputation.  Let me count the ways he fails as a salesman by using his health care “reform” law as an example.

First, he doesn’t understand the needs of the buying public and decides in advance what he wants to sell; not what people feel they need.  He believes myths and doesn’t bother to really understand the issue before he launches into his sales pitch.

He doesn’t understand his product so he makes up stuff along the way.  Therefore he contradicts himself and loses all credibility. He compounds the problem by changing the terms of the agreement and fudging on the details.  He keeps having to re-explain what he meant to the buyer (all of us) so he adds to the confusion.

He gives special deals away to some of his favorite clients and makes the rest of us pay the full price.  This is called the “waiver” programs.  This creates resentment and damages his reputation for honesty.

He blames others for the failure to get his message across.  With Obamacare he blames insurance companies, Republicans, “those who oppose change”, the Tea Party and entrenched “special interest” for not going along with his failed message and opposing his idea of reform.

Ultimately he insults the buyer for failing to understand all the great things they should be supporting and dismissing rather than understanding each objection people raise.  (“Let me be clear” is one of his favorite opening lines.) His tone and facial expressions show a lack of patience for those who don’t agree with his ideas.  The most successful sales people have learned the important art of listening; not talking.

Maybe all of this is why the President has such a negative view of health insurance agents.  He doesn’t understand how sales work and doesn’t appreciate the on going value of those who sell and service health insurance for their clients.  What a shame.  If he had utilized our knowledge and experiences in crafting sensible reforms we could have been his best sales force.  Instead half the state governments, most of the business community and large majorities of the American people oppose the law.  Pieces of the law are already unraveling and his Administration is constantly presenting contradictory and untrue testimony before Congress.  Common sense reform is needed.  A great opportunity has been delayed by the worst salesman in America.


The Future of Brokers

By Greg Scandlen

Now that the Medical Loss Ratio (MLR) standards are in effect, the role of producers is once again under scrutiny. Writing in Health Plan Week, Steve Davis reports on the recent NAHU conference in Washington, which included a presentation by former Pennsylvania Insurance Commissioner Joel Ario, who now directs HHS’s Office of Insurance Exchanges. Mr. Ario thinks there may be a role for brokers in the insurance exchanges as “navigators,” but:

Ario said the law envisions “baseline similarities” between navigators and insurance agents. However, he said agents sometimes don’t possess necessary “linguistic capacities” and “don’t necessarily serve all of the different populations as well as they could be served.” Those comments were met with boos.

In a follow-up post on the AISHealth Blog, Rick Biehl fleshes out the situation:

Certain features of health reform will invariably be detrimental to health plans, hospitals, provider groups and pharma companies. But for most of these bloated corporations the impact of reform is likely to resemble a pebble dropping into the middle of a lake. For agents and brokers – many of whom have been productive members of local communities for decades, if not generations – reform could mean the end of their livelihood and perhaps their profession. The lack of reason and fairness of this unintended consequence is palpable.

But Mr. Biehl thinks this is all just a horrible mistake:

While clearly not the intent of Congress, “insurance broker/agent” may be the only job title in America that, on a personal level, is facing such dire consequences under reform. Who else in health care business stands to suffer such enormous personal losses?

Sorry, Rick, but you are wrong on this. Getting rid of agents and brokers was EXACTLY the intent of Congress, and all other progressives of the past 100 years. When these people talk about “administrative waste” they mean broker commissions.

“Getting rid of the middleman” has been a core tenet of socialist policies forever. Salesmen especially are seen as leaches on society who add costs but no value, and the socialist economies suffer because of it. The old Soviet Union actually grew plenty of wheat on the farms, and it had plenty of hungry consumers in the cities. What it was missing were the middlemen who could arrange to transform the wheat into bread and transport it from the farm to the city.

Congressional progressives knew that by reducing loss ratios and creating exchanges, they would drive brokers out of business. They figured that consumer questions could best be answered by community organizers with the “necessary linguistic capacities” and experience in reaching out to “communities.” This was seen as a job for ACORN, not some independent businessmen.

All this has been obvious since before Obama got elected. It is shocking that the brokers still haven’t figured it out.

Want to Make a Difference?

By Greg Scandlen

Like you, I have been watching the events unfolding in Madison, Wisconsin with alarm. The thuggish tactics of the union supporters and the Democrat Senators are appalling. Never mind elections, who can yell the loudest?

That isn’t supposed to be how it works in this Republic. This isn’t Greece.  Here you are supposed to make your case to the voters. If you lose, come back in the next election and try again. That’s what the Republicans did with ObamaCare.

Now it is spreading to Ohio and Indiana, and if the unions win, it will become standard operating procedure across the country.

It all underscores how critical the states are to the future of this country. Much of this gets lost in the 24-hour news cycle that focuses much more on Washington and can’t even find Frankfurt, Kentucky on a map – at least not until it blows up. I have a much harder time finding out what is happening in Harrisburg than in Washington.

We have to change that. One of the best ways I know is by getting involved in your local free market think tank.  These folks are making a huge difference around the country. They do the research and present the case to their own legislators about policies that work by empowering citizens.

They deal with a wide variety of issues in addition to health care – school choice, taxes, environment, criminal justice, transportation – pretty much everything a state or local government does. That means the people who run them are spread pretty thin.  They may be expert in a single area, or they may be general economists or political activists. Rarely do they come from the business community, or have hands-on expertise in a field like health care.

You can help. Obviously, donating money to them is always welcome, but offering your own expertise is every bit as important. They need knowledgeable people to help write papers and op-eds, to make presentations at meeting, to testify before the legislature. Even just giving them encouragement can be helpful when the chips are down.

You can find the think tanks in your area by going to the web site of the State Policy Network. They maintain a directory of every free market think tank in America and they provide resources to help the local groups get stronger and better.

Your participation has never been more important.