We escaped some very bad reform
legislation, but there is still a lot to do and figure
As a trade association lobbyist, it’s dangerous to
identify favorite execs. After all, we love all our members.
That said, Bob Klonk of the Oswald Companies in Cleveland ranks
in the pantheon of the most plainspoken, hard-charging and
brutally funny guys to have served in our leadership.
He’s also the perfect metaphor for the pivot our trade
association has made to give benefits member firms
representation equal to that of property-casualty members.
In my early years with The Council, we were the
“National Association of Casualty and Surety
Agents.” With a tiny staff, we more or less faked it on
the benefits side. When Bob, the consummate benefits guy,
joined our board several years ago, he sent me groaning emails
whenever I sent updates about our property-casualty regulatory
reform issues. Here is one of his “reply all”
responses: “I can’t begin to tell you how little I
care about this!” He was kidding (I think), but he also
was making the right point: We had to get our act together on
healthcare reform, which would have profound consequences for
our member firms and their clients.
Fast forward. On the morning after the House passed
healthcare reform in March, a separate positive development
occurred in our quest to get surplus lines reform passed into
law, and I shared it widely. I barely heard a peep from our
Healthcare reform transfixed and dominated the consciousness
of our membership.
Instantly, we pivoted from the politics of healthcare reform
to implementation of the new law. Paraphrasing former Defense
Secretary Donald Rumsfeld, there are known knowns, known
unknowns, and unknown unknowns with regard to the ultimate
impact of this overhaul.
With virtually nothing in the legislation that addresses the
underlying costs of healthcare, insurance market reforms
unaccompanied by effective mandates, and massive new subsidies
“paid for” with bogus accounting tricks, the
overwhelming majority of Council member executives with whom I
speak think the legislation will ultimately have dreadful
consequences for the country. But the same execs recognize
terrific opportunities to bolster the value proposition to
their clients as they help them navigate the hazards of
compliance issues and become an even more critical link in
securing affordable coverage.
We have immediate and long-term tasks ahead in representing
the interest of Council firms as regulations are promulgated.
But before we move on, let’s remember what could have
happened in healthcare reform but didn’t, largely due to
our lobbying efforts.
We started 2009 with the White House health czar openly
proclaiming disintermediation of those “brokers out there
selling” plans as a benefit of ObamaCare. The premise was
that brokers were an unnecessary administrative expense and
that the federal government could distribute health insurance
products more effectively.
The original iteration of the House and Senate bills had a
single national exchange for individuals and small businesses,
with legislative language ignoring brokers and promoting the
idea of labor unions and the Small Business Administration as
better distributors. The original bills had “public
options” that threatened to put private plans into a
When Senate Majority Leader Harry Reid, D-Nev., released his
“merged” bill for Senate floor consideration, he
included the creation of a broker compensation authority at the
Department of Health and Human Services, plopped on top of
state-based exchanges. To say this proposal was offensive,
given the fact that neither of the two committees of
jurisdiction had ever debated or approved the idea, is an
After Scott Brown’s Senate victory in Massachusetts
deflated the prospects for healthcare reform, President Obama
aggressively proposed a new rate-setting office at HHS. That
would have likely been just as bad as the broker comp authority
in the long run—the worst of command-and-control
government price controls.
None of those things were signed into law. Working with blue
dog Democrats, we got explicit broker access language inserted
into the law for exchange products. The close relationships of
a handful of Council executives with moderate Senate Democrats
were successfully translated into the elimination of the Reid
broker comp provision. And in the “I’d rather be
lucky than good” category, the HHS rate authority
didn’t make the final cut because it didn’t fit
under budget reconciliation rules.
As one of our leaders put it in a conference call the
morning after the bill passed, “It’s a bag of
(expletive deleted), but it could have been a much bigger bag
of (expletive deleted).”
So, we move on. We make the best of this. We know Council
member firms are the marketplace winners who prove their value
every day, and we are confident that they’ll serve the
needs of their clients better than ever before. We’ll
intervene to try to positively affect the regulations, and
we’ll seek corrective and clarifying legislation. On the
big picture issue of erosion of employer-provided health
insurance, we’ll do what we can to make lemonade out of
Wood is The Council’s senior vice president of