CONFERENCE TO CENTER ON REFORM CLINTON CARE PLAN SHARPLY CUTS ROLE

CONFERENCE TO CENTER ON REFORM CLINTON CARE PLAN SHARPLY CUTS ROLE

Representatives of the nation's largest insurance companies, brokerages and agencies will be discussing ways to salvage their roles in the health insurance system when they convene for their annual conference at the Greenbrier Hotel and Resort in White Sulphur Springs, W.Va.

An estimated 1,200 leaders from the U.S. insurance industry are gathering Sunday through Wednesday to sort out how the Clinton administration's health care reform proposal will affect the underwriting and sale of insurance. For many agents and brokers, they will be searching for ways to survive in a revamped health care system that leaves little if any role for them.Conference attendees are responsible for 75 percent of annual insurance sales in the U.S., said Ken Crerar, executive vice president of the National Association of Casualty and Surety Agents, which is helping to organize the event.

The Clinton administration has been invited to send a senior health care adviser to address the conference.

Ira Magaziner, a senior White House domestic policy adviser and a top architect of the reform plan, said at a recent briefing that the Clinton proposal will reduce sharply the need for underwriters and claims handlers at many insurance companies and that the administration will offer a job retraining program to assist the displaced workers.

The diminished roles for insurers, brokers and agents under a revamped health care system will be highlighted during a health care panel at the conference that will be moderated by William W. Wyman, a managing partner with Oliver Wyman & Co., a management consulting firm in New York that advises multi-line insurers that offer health coverage.

"Insurers will suffer economic penalties if they choose to operate outside the narrowly defined health care system proposed by the Clinton administration," Mr. Wyman said.

The Clinton plan would create a National Health Care Board to establish regional health alliances to negotiate contracts with health plans to provide medical services.

"Insurers that fail to find a way to operate within that system, or whatever one is enacted, will struggle," Mr. Wyman said.

The Clinton plan will continue a marketplace trend of expanding the use of health maintenance organizations to provide medical services and rein in runaway health care costs, he said.

"That business (health care insurance) is changing and changing dramatically," Mr. Wyman said. "The insurance companies and producers need to learn how to deal with the changing context in which they will provide health care insurance."

Many agents and brokers fear the reform plan will squeeze them out of selling health insurance and providing advice about such coverage to their clients, said Joel Wood, vice president of government affairs with the casualty and surety agents' group.

"We think there is a role to be played by agents and brokers," Mr. Wood said. "It is naive on the administration's part to assume that cutting out agents and brokers will save administrative costs without adverse impact.

"I think the issue is one of whether or not a governmental bureaucracy can be more efficient and effective than the private sector. We don't want to have to be defensive about the critical role that agents and brokers play in the process. Agents and brokers are an integral part of the education process and claims handling process."

Albert R. "Skip" Counselman, chairman of the casualty and surety agents' legislative committee, said agents and brokers have been relied upon by many businesses for advice on selecting appropriate health care coverage.

Mr. Counselman, who also is president and chief executive officer of Baltimore-based insurance brokerage Riggs, Counselman, Michaels and Downs, said each regional health alliance created under the Clinton proposal will have the option of establishing a single-payer system that would eliminate any role for agents and brokers. Under a single-payer system, a health alliance would select one health plan to serve the needs of everyone in its geographic territory.

Such a system would eliminate consumer choice, Mr. Counselman added.

"Not having choice means you have to take whatever is available," Mr. Counselman said. "We have found in the past that clients have very different needs and make different selections when they choose a plan. It will simplify the process for some employers. But that may not be best for all employers."

Another key issue for insurers, agents and brokers is a section of the Clinton reform package that would require the health plans to provide treatment for injured individuals covered under workers compensation or auto insurance.

Under the Clinton proposal, workers compensation and auto insurers would reimburse the health plans for providing medical services to people injured on the job and in car accidents, respectively.

To restrain workers compensation costs, each health alliance would designate a case manager to coordinate the treatment of injured workers and ensure their rapid return to work. Workers compensation insurers have been worried that any change in the existing system would remove their ability to influence the care an injured person receives while leaving the insurer responsible for paying lost wages.

John O'Sullivan, a managing director of the insurance brokerage Marsh & McLennan, said workers compensation insurers generally are pleased with the Clinton plan.

One reason is that workers compensation insurers no longer would need to pay more for medical services than health insurers or the federal Medicare program, Mr. O'Sullivan said. The current system allows hospitals to charge workers compensation insurers more than the other insurance payers, he added.

But he and other agent and broker representatives question a part of the Clinton plan that would create a Commission on Health Benefit and Integration to study the feasibility of giving the health system responsibility for paying all medical benefits, including those covered by workers compensation and auto insurance policies. The commission's recommendations would be due by July 1, 1995.

Mr. O'Sullivan, also chairman of the casualty and surety agents' subcommittee on workers compensation, said the medical component of workers compensation insurance should not be transferred to the new health system

because it would leave workers compensation insurers responsible for paying lost wages but prevent the insurers from influencing the intensity of treatment an injured person receives to speed his or her return to the work place.