By Sarah Kliff
The Washington Post, April 8, 2013
Online insurance brokers see a potential windfall when the federal government doles out billions in subsidies to buy help Americans buy health insurance. And they are asking state governments to help them score it.
The online brokers want millions of new insurance customers to be able to use those subsidies to buy health coverage through their Web sites, rather than shop exclusively on the new exchanges being set up by states and the federal government.
“We have the expertise and already generate a tremendous amount of volume of sales,” says Gary Lauer, CEO of EHealth, the country’s largest online insurance broker. “The exchanges are spending a lot of money to enroll people, which is all fine, but we could do the same thing at no charge to the federal government.”
EHealth CEO Lauer does acknowledge that the site has financial motivations when it sells a health insurance plan. But he also contends that the federal regulations are strong enough to ensure that consumers get the same experience, no matter where they purchase coverage.
“We’re a profit-making company,” he said. “Our revenue source is the commission paid to brokers. It’s not an additional charge, it’s built into the premium, the same premium on the exchange. The only difference is the carrier will pay us a commission.”
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/08/in-obamacare-online-insurance-brokers-see-potential-windfall/
Comment:
By Don McCanne, M.D.
As Gary Lauer, CEO of EHealth states, “We’re a profit-making company.” Yes, they are a company that draws dollars (over 150 million of them in 2012) away from our heath care funds, and yet provides absolutely no services or products directly related to actual health care.
It is particularly irritating when he states that his firm can provide health insurance brokerage services for the exchanges being established under the Affordable Care Act “at no charge to the federal government,” because the charges are “built into the premium.”
Who pays those charges? The insurance companies certainly do not deduct these expenses directly from their profits. They weren’t born yesterday. As Lauer states, the charges are built into the premiums. Thus they are paid jointly by plan enrollees and by the federal government in the form of premium subsidies.
The expenses of these brokerages or of the state insurance exchanges wouldn’t even exist if we had one universal program instead of a multitude of private insurers, which in themselves generate tremendous administrative waste while imposing greater administrative burdens and costs on the actual providers of health care.
By insurance industry standards, maybe Gary Lauer’s compensation is modest ($1.67 million in 2012), but if he is providing us nothing of value, then any amount is too much.
Haven’t we had enough? Isn’t it time for an improved Medicare that covers everyone? Then Gary Lauer would have to get a real job.