Now that the healthcare reform bill with all final changes has been signed into law, what will be its impact on professional insurance agents and their customers?

As with anything this new and this complex – and because many of the details of how it will be implemented remain to be worked out – it is too early to definitively answer the question, “What does it mean?”

Court Challenges, Repeal Campaigns

When considering the impact of the new law, you should also bear in mind that it is being challenged in court on constitutional grounds by, as of this writing, 13 state Attorneys General. In addition, key Republicans say their party will run in the 2010 elections with a pledge to repeal the law.

How likely is it that a court challenge would be successful? The odds seem against it, but when it comes to trying to figure out what the courts will do, there’s no way to make an accurate prediction.

How likely is it that the Republicans will win enough seats in the House or the Senate to succeed in passing a repeal bill?  Again, predicting election results is a risky business. But something to consider: even if the GOP were to seize control of both chambers of Congress, it would not likely be by veto-proof margins. In such an event, any repeal bill could be vetoed by President Obama. Also, the filibuster shoe would then be back on the other foot in the Senate. Under GOP control, Republicans would need 60 votes to pass most bills.

So as it stands now, the healthcare reform bill is the law of the land, until something is determined otherwise by either the judicial branch or the legislative branch. In the meantime, the changes that the new law mandates will begin, and continue, unless or until courts or the American political process intervene.

PIA’s Focus – Agents

Throughout the long debate, PIA’s focus remained clear: protecting the business interests of professional independent insurance agents. PIA worked to ensure that agents would be able to continue to sell health insurance policies under any distribution system that might ultimately emerge. In this, PIA was successful.

The bill that was signed on March 23 includes language PIA worked to get included that ensures agents will be able to sell policies offered through the health insurance exchanges that will be set up. In addition, the Senate “fixes” bill does not change these agent provisions. We were aided by a former agent and PIA member who is now a member of Congress, Rep. Charlie Melancon. PIA named the conservative Blue Dog Democrat its 2010 Legislator of the Year.

In the early draft healthcare reform bills offered in 2009, licensed insurance agents would have been specifically barred from selling policies offered through the health insurance exchanges. Incredibly, so-called “navigators” for the exchanges would have been unlicenced individuals or community groups, empowered to perform the functions of licenced professional insurance agents!

PIA was also quite active in industry efforts to ensure that a repeal of the industry’s long-standing limited anti-trust exemption under the McCarran-Ferguson Act did not get included as part of healthcare “reform.” In this, PIA and our industry colleagues were also successful.

In February, the House voted 406-19 to support the Health Insurance Industry Fair Competition Act, repealing the exemption for medical insurers. The Senate has not acted on it. In the end, the measure was not among the House’s amendments to the U.S. Senate healthcare bill that was signed into law March 23.

Now, unless court challenges to the constitutionality of this legislation or attempts to repeal it are successful, the focus shifts to the implementation process. The Department of Health and Human Services (HHS) will spearhead the implementation process and the writing of regulations. And since the insurance exchanges will be state-based and because state-based regulations concerning health insurance have not been repealed (although some may be superseded by the new federal requirements), state Departments of Insurance will remain involved in the regulatory process. In addition, the National Association of Insurance Commissioners (NAIC) has certain responsibilities under the new law.

Over the next few years, as provisions of the bill are implemented, PIA will work to make certain that professional insurance agents in the private sector are not written out of participation by the federal entities that will be involved in writing regulations to implement the law.

Most of the provisions of this bill do not take effect for months, or even years. For example, the effective date for states to create health insurance exchanges is January 1, 2014.

The non-partisan Henry J. Kaiser Foundation, which studies health-related issues, has compiled a Summary of Coverage Provisions explaining key health coverage provisions of the legislation.

What It Means to Agents: With the debate over healthcare reform now concluded in Congress at least for the immediate future, it is important to realize that the debate now shifts to the courts and to the electoral process. Both have the potential to change the ultimate outcome – or, conversely, both could result in no change at all. But for now, one thing is certain: the landscape for health insurance will begin to change as the new law takes effect. PIA members who sell health insurance need to stay on top of these changes, in order to continue to protect their business interests.

Summary of Coverage Provisions  (Henry J. Kaiser Foundation)

Overview of Changes  (American Association of Association Executives)

Timeline for Changes  (Washington Post 3/23/10)

April 1, 2010