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Clinton's Health Plan : Health Plan: A User's Guide : For Care Givers and Businesses. . .There Are Reasons to Hope and Fear : INSURANCE AGENT : '(I) walk them through the whole process.'

September 26, 1993|THOMAS S. MULLIGAN

There's a joke going around Carla Magarity's office about career opportunities for health insurance agents under President Clinton's reform plan:

"And would you like fries with your order, sir?"

Of course not all agents would end up flipping burgers, but if the plan goes through as proposed, there won't be much of a role for them in marketing and servicing health plans, said Magarity, who works at a small agency in Reseda.

The reason: exclusive health alliances. The President's plan calls for creation of quasi-government agencies that would have near-monopoly franchises within their areas to negotiate with insurers for basic packages of health benefits. All consumers would get their benefits through such alliances.

Each regional alliance would choose perhaps six or seven insurers from among all those submitting bids. Losing bidders would be barred from doing business in that region. Some experts believe that this process would winnow the number of U.S. health insurers from hundreds to 10 or fewer.

Magarity's clients are several dozen individuals and about 70 groups--mainly small businesses with 10 to 50 employees. She offers them plans from as many as 50 insurance companies and health maintenance organizations.

Most of her work involves sorting through the myriad offerings to develop a small list of plans tailor-made to fit an employer's needs. Big companies have in-house benefits administrators to help them choose, but smaller firms can't afford that luxury. For them, the independent agent is their benefits consultant.

"For some businesses, I'm the most consistent thing in their history," Magarity said. "Owners have changed, office managers have changed, but I'm still here."

Agents make their money on commissions from the initial sale of policies and from annual renewals. They hold onto their customers by answering the phone and handling their questions about deductibles, co-payments, what's covered and what isn't. In disputes between consumers and their insurers or HMOs, agents can act as their clients' advocates, a role impossible for insurance company employees.

However, Magarity acknowledged, "If you're going to take choice away from people, then it's pretty tough to justify my role in the system."

Magarity, 46, got into the field in 1979 for a straightforward reason: She needed an income. Until then, she had been a full-time mother and part-time equestrienne.

Her agency is owned by a woman and employs two other women besides Magarity. The profession can be "much more open to women" than other fields, she said. There is independence and career mobility without the "glass ceiling" sometimes encountered in corporate life.

"I don't want to be sexist," she said, "but women are good at service. We remember details."

Magarity told of one client, a businessman with a brain tumor whose wife had a stroke. The man had a good opportunity to move into a new business in another state, but he had no idea how to make the move while keeping his insurance in force. A break in coverage would have been disastrous because the couple's medical problems made them uninsurable.

Magarity spent several hours developing a conversion plan so that the couple could transfer their coverage when they moved.

"Neither was sophisticated enough or able because of their health problems to handle this by themselves," she said. "I don't know who else would have done this for them, walk them through the whole process, tell them how to write the letter, who to call."

Backers of the Clinton plan say that it would eliminate such problems. Coverage would be fully portable for people moving from job to job, from state to state or in and out of the work force. Insurance forms and benefits would be so standardized that non-experts could understand them. Any problems that cropped up would be handled by employees of the alliances instead of by independent agents--and at less cost.

"I don't have a lot of faith in a government employee or someone on the end of an 800 number having the motivation to do all that I do," Magarity said.

Exclusive health alliances are a bad deal not only for agents but for consumers, she said. While standardizing and simplifying forms would be a welcome advance, she added, it would be a mistake to put the vast majority of insurers and HMOs out of business and to boil their offerings down to a single, cookie-cutter benefits package.

Magarity favors non-exclusive alliances that would compete with other carriers, as they do under California's pathfinding small-group health insurance system. More competition means more choice, she said, and if alliances can bring down costs as promised, other carriers would have to follow or die. Her ideal is closer to the alternative reform plan of Sen. John H. Chafee (R-R.I.).

But if the Clinton plan prevails, independent agents, like most health insurance company employees, would be out of the picture. Some undoubtedly would go to work for the health alliances, but Magarity viewed that as a bureaucratic job that hardly resembles her own.

"I guess I would be like anybody who gets fired," she said. "The problem is, I can't keep doing what I'm doing if Mr. Clinton fires me. My field won't exist."

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