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Where President Obama and Governor Romney Stand on Healthcare

Neither President Obama or Governor Romney are strangers to healthcare reform. With the issue being one of hottest topics of the election, we’ve looked at where the two stand on a few key elements...
October 18, 2012

Neither President Obama or Governor Romney are strangers to healthcare reform. With the issue being one of hottest topics of the election, we’ve looked at where the two stand on a few key elements.

This is not an endorsement of a candidate and is for informational purposes only.

President Obama

Governor Romney

President Obama made healthcare reform the cornerstone of his 2008 campaign, which ultimately led to him signing a variation of his proposal into law, the Patient Protection and Affordable Care Act (ACA), in 2010.As Governor of Massachusetts, he pushed a proposal that ultimately led to total reform of the state’s health care system and to the creation of the Health Connector, a state-based health exchange.

ON EXCHANGES

President Obama’s ultimate goal was to expand coverage while containing costs. To do this, he is relying on the implementation of Healthcare Exchanges, an online marketplace where individuals and small businesses can shop for health insurance. States have the option to set-up their own state-based exchange, work in regional coalitions with other states, or have the federal government implement an exchange for the state.

ON EXCHANGES

The Massachusetts exchange that was implemented under Governor Romney has some major similarities to the Affordable Care Act, causing him to back away from his exchange as his presidential campaign intensified. Overall, it is an online portal designed to assist individuals, families, young adults, and employers in purchasing health insurance. It offers participants Bronze, Silver, and Gold level plans and allows the state residents to compare and contrast plans.

ON AGENT AND BROKER COMPENSATION

Agents and brokers may act as a Navigator, which would allow them to assist in the enrollment of a policy through a health exchange. However, their compensation cannot come directly or indirectly from an insurer (page 8), which could result in reduced compensation. Actions taken by insurers trying to comply with new Medical Loss Ratio standards are also reducing agent and broker compensation for policies sold outside of a health exchange.

ON AGENT AND BROKER COMPENSATION

Governor Romney has not made public remarks specific to agent and broker compensation through an exchange. However, in Massachusetts, agents and brokers are allowed to sell coverage and be compensated (slide 10) through an exchange. For example, agents that sell a small business plan (1-5 full time employees) are paid $10/month per subscriber. For larger businesses (6-50 full time employees), agents and brokers earn 2.5% of the premium.

ON THE INDIVIDUAL MANDATE

Perhaps the most contentious part of the law, the Constitutionality of the individual mandate was brought before the Supreme Court where it was decided that the mandate is a tax. The ACA requires citizens to purchase health insurance or pay a tax starting in 2014. The initial penalty for a family will be no more than $285 or 1% of the household income (whichever is greater). This will ultimately increase to $2,085 per family or 2.5% of the household income.

ON THE INDIVIDUAL MANDATE

After a decision was rendered by the Supreme Court, Governor Romney said that he agreed that this is a tax. The Massachusetts health reform law also included an individual mandate. Governor Romney defends the Massachusetts mandate, since this was a state decision, not once brought down by the federal government. The current tax penalties in the Massachusetts exchange range from $19/month to $105/month, based on one’s income level.

ON BUSINESSES PENALTIES

There are no penalties for businesses with fewer than 50 full-time equivalent employees. However, a series of requirements/penalties are in place for employers with at least 50 full time employees, including financial penalties as high as $3,000/employee per year.

ON BUSINESSES PENALTIES

Under the Massachusetts law, employers of eleven or more full-time equivalent employees must offer insurance or pay a penalty. Governor Romney has noted that it was a decision that the state made, and not one that was forced by the federal government.

ON STATE VS FEDERAL HEALTH INSURANCE

President Obama’s plan requires states to implement exchanges and other reform measures with a small degree of flexibility. If a state is unwilling or unable to establish an exchange, the law allows the federal government to employ a federally regulated exchange (page 5) in the state.

ON STATE VS FEDERAL HEALTH INSURANCE

In response to the state requirements under the ACA, Governor Romney said he would give a waiver to every state, should they desire to opt out of the ACA requirements. He has also stated that states should be allowed to create and regulate their own program, based on the states specific needs.

ON TORT REFORM

President Obama has opposed tort reforms (page 3) that would impose a cap on awards from a medical malpractice case. However, during his 2011 State of the Union address (40.11 minutes), he indicated an openness to tort reforms that can reign in frivolous lawsuits. There has been no substantive action towards implementing changes.

ON TORT REFORM

Governor Romney supports placing caps on non-economic damages in medical malpractice lawsuits. He supports providing funding to states to develop ways to deal with liability issues.

ON THE FUTURE OF THE ACA

Should President Obama win the general election, he will continue implementation of the law.

ON THE FUTURE OF THE ACA

Governor Romney says that on his first day in office, he would issue an executive order that would allow ACA waivers for all fifty states. He would then encourage Congress to repeal the full legislation.

What it Means to Agents

Should President Obama win re-election, the ACA will continue to be implemented. Even with a Republican controlled Congress, President Obama would veto a repeal. Congress will likely not have enough votes to override a presidential veto.

Under a President Obama implementation, the ACA will continue to make it very difficult for agents to participate and be fairly compensated in the new reform measures. Utilizing the existing agent force is the best way to serve and protect consumers. Fair compensation should be allowed for agents who participate and should not be dictated by the federal law, which is occurring now. On the federal level, PIA is pushing for legislation that will protect fair agent compensation, while continuing an open dialogue with the Department of Health and Human Services. States also have some flexibility in implementing the law and allowing for agents to contribute, but not all states are open to this. Fortunately, some states are putting consumers first by encouraging agent participation. In Oklahoma, the insurance commissioner has issued a press release noting that anyone who will be enrolling consumers in a health policy will be required to be licensed like an agent. In Arkansas, the insurance department has issued a bulletin to easily allow agents to become licensed as consultants, which will allow them to charge a consultant fee. Other states, including Florida, Maryland, and Ohio, have been quite supportive of continued agent participation and have taken various actions to demonstrate this. It is imperative that states take these opportunities to allow for a fair playing field. PIA will continue to advocate for these policies.

However, should Governor Romney win the election, he will push for a full repeal of the ACA. Under a number of scenarios, it is possible that Congress would still not have enough votes in Congress to pass a full repeal. Should that be the case, Republicans will find ways to pullback some of the ACA, which could include easing access for state waivers. Regardless, Governor Romney says he would push for greater state control of health insurance based on private market health insurance programs, something that agents could benefit from by maximizing their relationships with state departments of insurance and their carriers.

All in all, massive changes are coming regardless of who wins in November. While agents are the most resilient work force in the country, adaptation will be key, as will be capitalizing on new areas for business opportunity. PIA will continue our hard-fought endeavors to maximize the role of agents, be it through federal regulation, federal rule-making, or state-based changes.

For more information on health care reform, visit PIA’s Health Care Reform webpage.

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