Talking Points - Day on the Hill - April 12, 2011

1. Exchanges/HCR:
   • Enforce Act 147: Only licensed insurance producers should sell, solicit or negotiate the Exchanges; Navigators must be explicitly prohibited from doing licensed insurance producers functions.
   • A member of the PA Association of Health Underwriters should be a formal member of the governing body of any state entity created to implement the Patient Protection Affordable Care Act and the Exchanges.
   • Support Exchange legislation where the government is a facilitator to Exchange-qualified plans closer to the Utah Model than the top-heavy Massachusetts Model.
   • Require Exchanges, multi-state plans, CO-OPS, or Multi-State Exchanges comply with Pennsylvania's mandate requirements before being able to do business in PA. If they are allowed to market their insurance without the mandates, they have a competitive advantage over those in the PA market which must comply; an alternative is to eliminate PA mandates not included in the Essential Benefits envisioned by PPACA, something that involves political risk even as it reduces the cost of insurance.
2. Medical Loss Ratio:
   • Support the PA Insurance Department requesting a waiver from the HHS Rules released November 22, 2010 governing the Medical Loss Ratio.
   • Support exclusion of Agent Commission from any Medical Loss Ratio calculation.
3. Agent Issues:
   • Enforce Act 147: Only licensed insurance producers should sell, solicit or negotiate the Exchanges; Navigators must be explicitly prohibited from doing licensed insurance producers functions.
   • Oppose imposition of sales tax on financial services which would include insurance agent commissions or fees.
   • Support of the creation of a limited producer license that retirees would use in order to keep commissions coming but would not permit sales, solicitation or negotiation of insurance contracts.
   • Support requiring CHIP must be marketed by licensed producers (not just allow producers to sell).
   • Support Requiring that the PA Department of Aging utilize volunteer licensed insurance producers in APPRISE and other program designed to educate seniors regarding insurance choices.
4. Tort Issues:
   • Support passage of the Fair Share Act (replacing joint and several liability doctrine with standards of comparative negligence), product liability shortened statute of repose, tort reform such as innocent seller protection from product liability lawsuits (example would be a hardware store getting sued for a defective ladder manufactured by someone else, etc.
   • Amend Legislation with a 'hold harmless' provision for physicians using a Patient Information Exchange (data base where doctors can access information from a test someone else has done and thus reducing the numbers of duplicative tests) to be protected from lawsuits attacking the conduct of the test itself.
5. Miscellaneous Issues:
   • Support requiring carriers doing group business in PA pay claims for full time employers over age 65 as 'Medicare Secondary', regardless of group size (the 20 person count will become unnecessary).
   • Oppose PEO Legislation
   • The insurance ombudsman function should be performed by the Insurance Department
   • Amend False Claims Act legislation eliminating fines for those entities that discover an unintentional system error leading to payment from the government; Error must be self-reported, not discovered; Repayment would need to take place along with the entity being placed in a 'watch' status for five years.
   • Require that insurance be a component line of study for a student to graduate from high school or vocational school
   • Oppose consolidation of school benefit plans
   • Support changing health insurance mandate legislation to a 2/3 voting requirement by both chambers plus a mandatory analysis of market impact of the proposed mandate by PHC4.

Agent Marketing - Pennsylvania Health Exchange

As the General Assembly considers implementation of the Patient Protection and Affordable Care Act in Pennsylvania, the PA Association of Health Underwriters (PAHU) asks that you consider the following:

Insurance products must be marketed according to insurance law.
This basic legal question occurs where any quasi-government program advertises itself as an insurance program. Act 147 specifically specifies that anyone involved in "sale, solicitation, or negotiation" of insurance contracts must be a licensed insurance producer (agent). Exchanges are an insurance product and thus agents must be at the center of 'sale, solicitation and negotiation".

This is particularly salient because the government plan will directly compete with traditional private sector insurance programs.
Any rationale of excluding insurance producers (agents) because of the public sector nature of these programs is not consistent with other public sector programs using insurance producers. Examples include FAIR (fire insurance), the National Flood Insurance Program, Crop Insurance, Assigned Risk (auto), JUA (medical malpractice insurance), and Pennsylvania's own DEP Mine Subsidence Program. These are relevant insurance distribution models for when the public sector is involved.

Insurance agents should have a formal seat at the Implementation Authority table because they make the insurance system work. Agents help the parts of the system communicate with each other. They work with customers, health care providers, insurers, and the government to make sure that people understand the coverage as well as providing themselves as a resource to try to get legitimate claims paid. Marketing and communication will be the key in making the Exchanges and their marketing and claims resolution workable.

Insurance agents provide an efficient outreach and distribution model.
Insurance producers know their communities and will know when an employee or an individual needs access to the Exchange. This direct knowledge means that placement is done more effectively because it is targeted. Seeing an Exchange TV ad will simply not be enough to get someone to enroll. Personal retail solicitation makes the difference. And, insurance producers don't send in an application unless it is complete, saving program dollars by reducing insurer/Exchange processing time and cost.

Taxpayer subsidized Exchange electronic and print media marketing as well as billboards, etc. may increase general awareness but does not make a sale. Direct contact is most effective.

Just as agents receive compensation for the other public sector programs such as (FAIR, Assigned Risk, JUA, Crop, Flood, and mine subsidence it is reasonable that a commission or fee should be paid to the agent to help compensate him or her for time spent. These are legitimate expenses of the value of time spent.