Healthcare Costs on the Run
From March 2005
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Broker commissions, paid by the carriers and built into premiums, are typically 10 percent to 20 percent for individual policies the first year, then scaled back substantially for subsequent years; 4 percent to 8 percent for small groups; and 3 percent to 5 percent for large groups, reports David Fear Sr., president of Fear Insurance Services in Rancho Cordova (www.fearcorp.com). He’s also vice president of the National Association of Health Underwriters (www.nahu.org).
Carriers are required to file their rates with the California Department of Insurance and must charge the same price, no matter if the coverage is or isn’t purchased through a broker. Fear says he’s not aware of any group product currently available in the area that offers discounts for direct purchase of health insurance over the internet.
“Healthcare is a dynamic industry,” says Gutfeld. “It changes even as we speak. If you’re going to use a broker, you have to make sure he or she is staying on top of the changes and the laws, any new plans and any savings available. You want to get a broker who’s got his or her finger on the pulse.”
A good broker can also be an asset in negotiating with carriers, and can computer-generate side-by-side comparisons of various plans to keep clients abreast of changes and new products. “Employers need to keep demanding the most coverage at the lowest price,” says Musallam at UC Davis. “There’s enough money in the system. It’s just that we don’t know how to negotiate for it. We have to be much tougher with the insurance companies.”
The Long-Term View
Although Musallam agrees that wellness and prevention are the ultimate goals and part of a long-term solution to controlling healthcare costs, they will not single-handedly resolve the healthcare quagmire because they don’t target what he considers the biggest cost driver: the uninsured and underinsured.
“It seems to me,” he says, “that what we really need is some type of structure to provide some level of acceptable benefits to most Americans. We need to have some type of umbrella system that is provided either through tax-based money from the government or through tax credits the government offers people if they don’t want to buy the basic insurance, to allow everybody to have at least some level of coverage (that carriers would compete to provide).”
As CHCF’s Yegian says: “There’s no magic bullet. If it were easy, it would already have occurred.”
Carriers are required to file their rates with the California Department of Insurance and must charge the same price, no matter if the coverage is or isn’t purchased through a broker. Fear says he’s not aware of any group product currently available in the area that offers discounts for direct purchase of health insurance over the internet.
“Healthcare is a dynamic industry,” says Gutfeld. “It changes even as we speak. If you’re going to use a broker, you have to make sure he or she is staying on top of the changes and the laws, any new plans and any savings available. You want to get a broker who’s got his or her finger on the pulse.”
A good broker can also be an asset in negotiating with carriers, and can computer-generate side-by-side comparisons of various plans to keep clients abreast of changes and new products. “Employers need to keep demanding the most coverage at the lowest price,” says Musallam at UC Davis. “There’s enough money in the system. It’s just that we don’t know how to negotiate for it. We have to be much tougher with the insurance companies.”
The Long-Term View
Although Musallam agrees that wellness and prevention are the ultimate goals and part of a long-term solution to controlling healthcare costs, they will not single-handedly resolve the healthcare quagmire because they don’t target what he considers the biggest cost driver: the uninsured and underinsured.
“It seems to me,” he says, “that what we really need is some type of structure to provide some level of acceptable benefits to most Americans. We need to have some type of umbrella system that is provided either through tax-based money from the government or through tax credits the government offers people if they don’t want to buy the basic insurance, to allow everybody to have at least some level of coverage (that carriers would compete to provide).”
As CHCF’s Yegian says: “There’s no magic bullet. If it were easy, it would already have occurred.”
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