The Association of The Association of Health Health

Underwriters:Underwriters:Presidential PerspectivesPresidential Perspectives

Presentation byPresentation by

David L. Fear, Sr. RHUDavid L. Fear, Sr. RHU2006-2007 President2006-2007 President

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What I’m Going To Talk What I’m Going To Talk AboutAbout

Healthcare’s FutureHealthcare’s Future Industry RelationsIndustry RelationsNAHU’s tentNAHU’s tentThe next generationThe next generation

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Healthcare’s FutureHealthcare’s Future U.S. healthcare is 1/7U.S. healthcare is 1/7thth of of

the economythe economy Costs have outpaced Costs have outpaced

inflation nearly 2:1 over the inflation nearly 2:1 over the past 30 yrs.past 30 yrs.

The debate has shifted from The debate has shifted from access to affordability in the access to affordability in the past 10 yearspast 10 years

The “bell curve” is still very The “bell curve” is still very evident in public polling:evident in public polling:– 25% want government 25% want government

controlcontrol– 25% want full privatization25% want full privatization– 50% in the middle want 50% in the middle want

someone else to pay the someone else to pay the cost and tip either way cost and tip either way depending upon the “issue depending upon the “issue of the month”of the month”

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Healthcare’s FutureHealthcare’s Future Proposed alternatives are all Proposed alternatives are all

over the board:over the board:– Socialized medicine & Single Socialized medicine & Single

payerpayer– Private medicine but a Single Private medicine but a Single

payerpayer– Employer mandates such as Employer mandates such as

“play or pay”“play or pay”– Individual mandatesIndividual mandates– Tax incentives for employers Tax incentives for employers

to provide coverageto provide coverage– Tax incentives for individuals Tax incentives for individuals

to purchase coverageto purchase coverage– A blend of public/private A blend of public/private

programs such as:programs such as: Medicare/SupplementsMedicare/Supplements Kiddie-Care for FPL eligiblesKiddie-Care for FPL eligibles Kiddie-Care with vouchersKiddie-Care with vouchers Medicaid/Managed CareMedicaid/Managed Care Medicaid with vouchersMedicaid with vouchers

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Healthcare’s FutureHealthcare’s Future Ideas that are picking Ideas that are picking

up interest:up interest:– Single Payer @ State Single Payer @ State

LevelLevel– Employer / Employee Employer / Employee

Mandate @ State LevelMandate @ State Level– Extension of Medicare to Extension of Medicare to

all with private all with private supplementssupplements

– Private plans with Private plans with individual vouchers individual vouchers

All seem to focus on All seem to focus on the the government government providing fundsproviding funds to to pay for coveragepay for coverage

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Healthcare’s FutureHealthcare’s Future The role of the private The role of the private

sector may be changing:sector may be changing:– Large employers question Large employers question

their ability to contain their ability to contain costscosts

– Unions want to look good Unions want to look good and gain membersand gain members

– Small employers are Small employers are dropping coverage and dropping coverage and focusing in on dollarsfocusing in on dollars

– Consumer Directed Health Consumer Directed Health Care is the latest in long Care is the latest in long line of private sector line of private sector initiatives:initiatives:

Managed CareManaged Care Utilization ReviewUtilization Review Flexible BenefitsFlexible Benefits Network ContractingNetwork Contracting Alternative FundingAlternative Funding

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Healthcare’s FutureHealthcare’s Future Looking at our neighbors:Looking at our neighbors:

– CanadaCanada must ration care to must ration care to hold down costshold down costs

– EnglandEngland has agreed to has agreed to private providers and private private providers and private insurance to supplement insurance to supplement what the government cannot what the government cannot afford or provideafford or provide

– GermanyGermany, , JapanJapan are are changing the role of changing the role of employers to provide employers to provide mandated coverage featuresmandated coverage features

– FranceFrance struggles with struggles with paying the tab on an paying the tab on an increasingly less productive increasingly less productive workforceworkforce

– ““Third World CountriesThird World Countries” ” are offering less costly are offering less costly health care with high quality health care with high quality providersproviders

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Healthcare’s FutureHealthcare’s Future In the U.S.A., healthcare has been a In the U.S.A., healthcare has been a

political issue since the 1930’s and political issue since the 1930’s and became a huge part of public policy became a huge part of public policy in the 1960’s with the creation of in the 1960’s with the creation of Medicare and MedicaidMedicare and Medicaid

The cost of health care is the issue, The cost of health care is the issue, and how that cost will be financedand how that cost will be financed– Premiums vs. TaxesPremiums vs. Taxes– Consumers vs. BusinessesConsumers vs. Businesses– Private Insurance vs. Public CoveragePrivate Insurance vs. Public Coverage– Mandated vs. Voluntary PurchaseMandated vs. Voluntary Purchase

A balance between public and A balance between public and private sector needs to be private sector needs to be maintainedmaintained– Government is the largest purchaser Government is the largest purchaser

of health care servicesof health care services– Private sector has been the recipient Private sector has been the recipient

of cost shifting for many yearsof cost shifting for many years– Providers want to practice medicine Providers want to practice medicine

and be paid for their servicesand be paid for their services– Consumers want access and Consumers want access and

reasonable cost sharingreasonable cost sharing– Businesses want more control over Businesses want more control over

what they pay forwhat they pay for– Politicians want the votesPoliticians want the votes

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Industry RelationsIndustry Relations NAHU is in a unique NAHU is in a unique

position:position:– Our members represent Our members represent

consumersconsumers and and businessbusiness interestsinterests

– We understand how We understand how realreal lifelife health care health care worksworks

– We know about the We know about the good and badgood and bad of the of the private systemprivate system

Industry RelationsIndustry Relations– With carriersWith carriers– With providersWith providers– With regulatorsWith regulators– With legislatorsWith legislators

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Industry RelationsIndustry Relations The Role of the AgentThe Role of the Agent

– The story of The story of what our members what our members dodo every day needs to be told every day needs to be told

– Helping regulators and legislators Helping regulators and legislators consider all the factsconsider all the facts in in formulating good public policyformulating good public policy

– Helping the Helping the MediaMedia to report the to report the real story and the factsreal story and the facts

– Working with our carrier partners Working with our carrier partners to to improve the imageimprove the image of the of the private sector systemprivate sector system

– Working with Working with providersproviders to better to better meet the needs of our customersmeet the needs of our customers

– Making the Making the Private SystemPrivate System Work!Work!

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Industry RelationsIndustry Relations Local/State/National AHU roles Local/State/National AHU roles

have never been more importanthave never been more important– Working with public policy officials at Working with public policy officials at

local, state, national levelslocal, state, national levels– Working with local, state, national Working with local, state, national

media to tell our storymedia to tell our story– Working with local, state, regional Working with local, state, regional

and national carriers to develop and national carriers to develop products and services that are products and services that are attractive to our consumer and attractive to our consumer and business customersbusiness customers

– Working with agents, brokers and Working with agents, brokers and consultants to meet their consultants to meet their professional needs and to achieve professional needs and to achieve success!success!

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NAHU’s TentNAHU’s Tent We are the association of We are the association of

“health underwriters”“health underwriters”– Agents, brokers, home Agents, brokers, home

office personnel who sell, office personnel who sell, service, underwrite health service, underwrite health insurance for individuals, insurance for individuals, groups and other groups and other organizationsorganizations

– We originally were We originally were specialists in “accident”, specialists in “accident”, “disability” and “health” “disability” and “health” related productsrelated products

– Our current membership is Our current membership is made up of:made up of:

Producers (agents, brokers)Producers (agents, brokers) Wholesalers (general Wholesalers (general

agents)agents) Manufacturers (carriers)Manufacturers (carriers)

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NAHU’s TentNAHU’s Tent How many licensed How many licensed

professionals are there in professionals are there in America:America:– At least a million?At least a million?

How many are health How many are health insurance specialists?insurance specialists?– 2%, 5%, 10%, 20%, more?2%, 5%, 10%, 20%, more?

How many are dues paying How many are dues paying members of an A.H.U.?members of an A.H.U.?– 20,000+ in 200620,000+ in 2006

There is strength in There is strength in numbers and the A.H.U. numbers and the A.H.U. has never needed them has never needed them more than now!more than now!

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NAHU’s TentNAHU’s Tent We have formed “Advisory We have formed “Advisory

Groups”:Groups”:– To expand our membershipTo expand our membership– To meet the needs of these To meet the needs of these

non-health insurance non-health insurance professionalsprofessionals

– To help our existing To help our existing members understand other members understand other alternativesalternatives

NAHU Advisory Groups:NAHU Advisory Groups:– Disability Income Advisory Disability Income Advisory

Group (DIAG)Group (DIAG)– Long Term Care Advisory Long Term Care Advisory

Group (LTCAG)Group (LTCAG)– Worksite Marketing Worksite Marketing

Advisory Group (WMAG)Advisory Group (WMAG)– Senior/Medicare Advisory Senior/Medicare Advisory

Group (SMAG)Group (SMAG)

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NAHU’s TentNAHU’s Tent Advisory Groups are Advisory Groups are

helping us meet the helping us meet the two basic needs of two basic needs of association members:association members:– Membership AffairsMembership Affairs

(membership services, (membership services, education, programs, education, programs, awards & recognition, awards & recognition, training & networking)training & networking)

– Public AffairsPublic Affairs (legislative and (legislative and regulatory matters, regulatory matters, media relations, political media relations, political action committees, action committees, industry relations)industry relations)

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NAHU’s TentNAHU’s Tent Remember: At one time Remember: At one time

NAHU wasn’t involved in NAHU wasn’t involved in health insurance as we health insurance as we know it today – know it today – we evolved we evolved to what we areto what we are

It’s time for us to evolve into It’s time for us to evolve into something something bigger, broader bigger, broader and of more valueand of more value to a to a larger segment of the larger segment of the industryindustry

While we have high hopes While we have high hopes for the private health for the private health insurance industry, insurance industry, NAHU NAHU would fail to meet the needs would fail to meet the needs of members if it were to of members if it were to ignore these other ignore these other specialties in our industryspecialties in our industry!!

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The Next GenerationThe Next Generation

Fact: Average age of Fact: Average age of today’s health today’s health insurance agent is insurance agent is over age 50over age 50

Fact: There Fact: There isis a future a future for agents in the for agents in the delivery of insurance delivery of insurance products and servicesproducts and services

Fact: Young people Fact: Young people are just as smart and are just as smart and hungry as we were 30 hungry as we were 30 years ago!years ago!

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The Next GenerationThe Next Generation NAHU has formed a “Young Agent NAHU has formed a “Young Agent

Task Force”Task Force”– To begin to strategize on a game To begin to strategize on a game

plan to recruit younger people into plan to recruit younger people into our businessour business

– Chaired by Steve Selinsky (NAHU Chaired by Steve Selinsky (NAHU Secretary) and Ryan Thorn (NAHU Secretary) and Ryan Thorn (NAHU RVP)RVP)

The Life insurance industry has The Life insurance industry has done this and the P&C industry still done this and the P&C industry still does thisdoes this– We can learn from themWe can learn from them– We can work with themWe can work with them

Other segments of the NAHU family Other segments of the NAHU family may be involved including the may be involved including the NAHU Education Foundation and NAHU Education Foundation and the NAHU Industry Relations the NAHU Industry Relations CommitteeCommittee

We will work with our carrier We will work with our carrier partners and “sister” organizations partners and “sister” organizations to reach out and inform, educate, to reach out and inform, educate, recruit, train and manage young recruit, train and manage young professionals in our businessprofessionals in our business

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The Next GenerationThe Next Generation Our members need to tell us Our members need to tell us

what they need and we need what they need and we need to respondto respond

Our chapters need to work Our chapters need to work with us because all with us because all membership benefits start at membership benefits start at the the locallocal level level

Young people are interested Young people are interested in honorable careers, making in honorable careers, making a living, succeeding and a living, succeeding and excelling in this businessexcelling in this business

We need to seek them out, We need to seek them out, encourage them and show encourage them and show them the benefits of our them the benefits of our profession and the profession and the associationassociation

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Summary & ConclusionSummary & Conclusion

There is a There is a future for the private future for the private health care and health insurance health care and health insurance systemsystem – but it – but it may look differentmay look different from what we have today!from what we have today!– Government & Private Sector initiatives Government & Private Sector initiatives

will continue to refine and modify the will continue to refine and modify the system over time.system over time.

– The The cost of health carecost of health care is becoming the is becoming the “third rail” of public policy.“third rail” of public policy.

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Summary & ConclusionSummary & Conclusion

Some in the public policy world will Some in the public policy world will try to “try to “divide & conquerdivide & conquer” our ” our industry by playing parties against industry by playing parties against each other: Agents, Providers, each other: Agents, Providers, InsurersInsurers– NAHU will continue to maintain a NAHU will continue to maintain a seat at seat at

the industry tablethe industry table to try and formulate to try and formulate alternatives that work.alternatives that work.

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Summary & ConclusionSummary & Conclusion

NAHU is NAHU is expanding it’s membership expanding it’s membership tenttent to include professionals in to include professionals in other other specialtiesspecialties including DI, LTC, including DI, LTC, Worksite and Senior productsWorksite and Senior products– Our local, state and national programs Our local, state and national programs

must meet these needs in terms of must meet these needs in terms of government affairs, media relations, government affairs, media relations, membership, education, networking and membership, education, networking and professional developmentprofessional development

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Summary & ConclusionSummary & Conclusion

NAHU is formally pursuing a strategy NAHU is formally pursuing a strategy to to get get younger agentsyounger agents involved involved in in the industry and in the associationthe industry and in the association– A “Young Agent Task Force” has been A “Young Agent Task Force” has been

formed and will formulate strategies to formed and will formulate strategies to accomplish this taskaccomplish this task

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Remember…Remember…

Each of us needs to do 3 things:Each of us needs to do 3 things:

1.1. RecruitRecruit at least two new at least two new membersmembers

2.2. ParticipateParticipate in 3 “Operation in 3 “Operation Shouts”Shouts”

3.3. DonateDonate at least $150 to the PAC at least $150 to the PAC

This is the year to:This is the year to:

““Make It Make It Happen!”Happen!”