Rod St. Aubyn: Obamacare Has Made Common Sense State Reforms Illegal


I had the opportunity to attend the hearing for SB 2163 which was sponsored by Senator Oley Larsen, a former school teacher and now an insurance agent.  While proposing a common sense approach to the Affordable Care Act (ObamaCare), this bill is destined to be defeated because it is expressly prohibited by federal law.

The drafters of ObamaCare made sure that all common sense was removed from the law.  They made sure that insurance agents were kept far away from the health insurance exchanges.  Their approach was to create a system of “navigators and assisters” (another added cost) to guide consumers through the exchange.  Never mind the fact that these “navigators and assisters” were not formally trained in the intricacies of insurance laws for each state.  In addition, they were expressly prohibited from advising the consumer which insurance product best met the consumer’s personal needs.  These “navigators and assisters” are compensated for guiding the consumer through the exchange.  To ensure that LICENSED insurance agents are excluded from serving these roles, the legislation expressly prohibited a navigator from receiving any remuneration from any insurance agent.  Insurance agents are typically compensated via commissions from insurers.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#000000″ txt_color=”#ffffff”]”The drafters of ObamaCare made sure that all common sense was removed from the law.”[/mks_pullquote]

The world of insurance is complicated.  Many options are available within the exchange, though far fewer than the “pre-ObamaCare” days.  Currently only three insurers (Blue Cross Blue Shield of ND, Sanford Health Insurance, and Medica) offer a little over 30 insurance products on the exchange.  Premiums have increased significantly.  Though some citizens benefit from subsidies to offset the increase costs, the future for those subsidies could be in doubt for ND consumers depending upon how the Supreme Court rules in June on a case regarding subsidies for state-based exchanges versus the Federal health exchange.  Some products offer lower premiums, but they have varying types of cost shares and in some cases different benefits.

Insurance agents can still sell products directly to the consumers.  Many agents sell products from multiple insurers.  Insurance products sold via the exchange or through an agent are required to be priced the same.   These agents perform the same duties as these navigators, but more.  These navigators CANNOT advise consumers which products seem to best match the consumers’ personal needs.  Sen. Judy Lee, the chair of the Senate Human Services Committee best described the situation.  She said it is like these navigators can lead the consumers to the edge of the cliff, but they won’t say where to go from there.

Sen. Larsen’s bill is basically very simple.  It states that all navigators must be licensed insurance agents to afford protections for the consumer so that the advice offered meets state laws.  But the bill stands absolutely no chance.  The federal government has prohibited such action.  In fact, in a Frequently Asked Questions advisory submitted by CMS, they directly address this issue.

  • Q: “Can states require Navigators to hold a producer license?”
  • A:  “…a state or Exchange cannot require Navigators to hold a producer license (i.e., a license as an agent or broker) for the purpose of carrying out any of the duties required of Navigators…”

Why in the world would we exclude the professionals “trained and licensed” to do this work from these important functions?  Once again, we witness the death of common sense.  SB 2163 is unfortunately doomed for defeat because of these federal laws.  The federal government has once again encroached into the insurance world, which should be determined by the states.

The political reality is that we won’t be able to repeal the ACA in the immediate future.  Though Republicans control both houses of Congress, Obama is sure to veto any bill to repeal the ACA and Republicans do not have the votes to override his veto.  Republicans need to make publically supported common sense “fixes” to this act.  If the Presidents’ loyalists fail to support these fixes and if the President vetoes these fixes, the public will be reminded during the next election.  Actions have consequences and hopefully the voters will remember.  It is time to bring common sense back to the political world.