The Association of Health Underwriters: Presidential Perspectives Presentation by David L. Fear, Sr. RHU President

2 What I’m Going To Talk About Healthcare’s Future Healthcare’s Future Industry Relations Industry Relations NAHU’s tent NAHU’s tent The next generation The next generation

3 Healthcare’s Future U.S. healthcare is 1/7 th of the economy U.S. healthcare is 1/7 th of the economy Costs have outpaced inflation nearly 2:1 over the past 30 yrs. Costs have outpaced inflation nearly 2:1 over the past 30 yrs. The debate has shifted from access to affordability in the past 10 years The debate has shifted from access to affordability in the past 10 years The “bell curve” is still very evident in public polling: The “bell curve” is still very evident in public polling: –25% want government control –25% want full privatization –50% in the middle want someone else to pay the cost and tip either way depending upon the “issue of the month”

4 Healthcare’s Future Proposed alternatives are all over the board: Proposed alternatives are all over the board: –Socialized medicine & Single payer –Private medicine but a Single payer –Employer mandates such as “play or pay” –Individual mandates –Tax incentives for employers to provide coverage –Tax incentives for individuals to purchase coverage –A blend of public/private programs such as:  Medicare/Supplements  Kiddie-Care for FPL eligibles  Kiddie-Care with vouchers  Medicaid/Managed Care  Medicaid with vouchers

5 Healthcare’s Future Ideas that are picking up interest: Ideas that are picking up interest: –Single State Level –Employer / Employee State Level –Extension of Medicare to all with private supplements –Private plans with individual vouchers All seem to focus on the government providing funds to pay for coverage All seem to focus on the government providing funds to pay for coverage

6 Healthcare’s Future The role of the private sector may be changing: The role of the private sector may be changing: –Large employers question their ability to contain costs –Unions want to look good and gain members –Small employers are dropping coverage and focusing in on dollars –Consumer Directed Health Care is the latest in long line of private sector initiatives:  Managed Care  Utilization Review  Flexible Benefits  Network Contracting  Alternative Funding

7 Healthcare’s Future Looking at our neighbors: Looking at our neighbors: –Canada must ration care to hold down costs –England has agreed to private providers and private insurance to supplement what the government cannot afford or provide –Germany, Japan are changing the role of employers to provide mandated coverage features –France struggles with paying the tab on an increasingly less productive workforce –“Third World Countries” are offering less costly health care with high quality providers

8 Healthcare’s Future In the U.S.A., healthcare has been a political issue since the 1930’s and became a huge part of public policy in the 1960’s with the creation of Medicare and Medicaid In the U.S.A., healthcare has been a political issue since the 1930’s and became a huge part of public policy in the 1960’s with the creation of Medicare and Medicaid The cost of health care is the issue, and how that cost will be financed The cost of health care is the issue, and how that cost will be financed –Premiums vs. Taxes –Consumers vs. Businesses –Private Insurance vs. Public Coverage –Mandated vs. Voluntary Purchase A balance between public and private sector needs to be maintained A balance between public and private sector needs to be maintained –Government is the largest purchaser of health care services –Private sector has been the recipient of cost shifting for many years –Providers want to practice medicine and be paid for their services –Consumers want access and reasonable cost sharing –Businesses want more control over what they pay for –Politicians want the votes

9 Industry Relations NAHU is in a unique position: NAHU is in a unique position: –Our members represent consumers and business interests –We understand how real life health care works –We know about the good and bad of the private system Industry Relations Industry Relations –With carriers –With providers –With regulators –With legislators

10 Industry Relations The Role of the Agent The Role of the Agent –The story of what our members do every day needs to be told –Helping regulators and legislators consider all the facts in formulating good public policy –Helping the Media to report the real story and the facts –Working with our carrier partners to improve the image of the private sector system –Working with providers to better meet the needs of our customers –Making the Private System Work!

11 Industry Relations Local/State/National AHU roles have never been more important Local/State/National AHU roles have never been more important –Working with public policy officials at local, state, national levels –Working with local, state, national media to tell our story –Working with local, state, regional and national carriers to develop products and services that are attractive to our consumer and business customers –Working with agents, brokers and consultants to meet their professional needs and to achieve success!

12 NAHU’s Tent We are the association of “health underwriters” We are the association of “health underwriters” –Agents, brokers, home office personnel who sell, service, underwrite health insurance for individuals, groups and other organizations –We originally were specialists in “accident”, “disability” and “health” related products –Our current membership is made up of:  Producers (agents, brokers)  Wholesalers (general agents)  Manufacturers (carriers)

13 NAHU’s Tent How many licensed professionals are there in America: How many licensed professionals are there in America: –At least a million? How many are health insurance specialists? How many are health insurance specialists? –2%, 5%, 10%, 20%, more? How many are dues paying members of an A.H.U.? How many are dues paying members of an A.H.U.? –20,000+ in 2006 There is strength in numbers and the A.H.U. has never needed them more than now! There is strength in numbers and the A.H.U. has never needed them more than now!

14 NAHU’s Tent We have formed “Advisory Groups”: We have formed “Advisory Groups”: –To expand our membership –To meet the needs of these non-health insurance professionals –To help our existing members understand other alternatives NAHU Advisory Groups: NAHU Advisory Groups: –Disability Income Advisory Group (DIAG) –Long Term Care Advisory Group (LTCAG) –Worksite Marketing Advisory Group (WMAG) –Senior/Medicare Advisory Group (SMAG)

15 NAHU’s Tent Advisory Groups are helping us meet the two basic needs of association members: Advisory Groups are helping us meet the two basic needs of association members: –Membership Affairs (membership services, education, programs, awards & recognition, training & networking) –Public Affairs (legislative and regulatory matters, media relations, political action committees, industry relations)

16 NAHU’s Tent Remember: At one time NAHU wasn’t involved in health insurance as we know it today – we evolved to what we are Remember: At one time NAHU wasn’t involved in health insurance as we know it today – we evolved to what we are It’s time for us to evolve into something bigger, broader and of more value to a larger segment of the industry It’s time for us to evolve into something bigger, broader and of more value to a larger segment of the industry While we have high hopes for the private health insurance industry, NAHU would fail to meet the needs of members if it were to ignore these other specialties in our industry! While we have high hopes for the private health insurance industry, NAHU would fail to meet the needs of members if it were to ignore these other specialties in our industry!

17 The Next Generation Fact: Average age of today’s health insurance agent is over age 50 Fact: Average age of today’s health insurance agent is over age 50 Fact: There is a future for agents in the delivery of insurance products and services Fact: There is a future for agents in the delivery of insurance products and services Fact: Young people are just as smart and hungry as we were 30 years ago! Fact: Young people are just as smart and hungry as we were 30 years ago!

18 The Next Generation NAHU has formed a “Young Agent Task Force” NAHU has formed a “Young Agent Task Force” –To begin to strategize on a game plan to recruit younger people into our business –Chaired by Steve Selinsky (NAHU Secretary) and Ryan Thorn (NAHU RVP) The Life insurance industry has done this and the P&C industry still does this The Life insurance industry has done this and the P&C industry still does this –We can learn from them –We can work with them Other segments of the NAHU family may be involved including the NAHU Education Foundation and the NAHU Industry Relations Committee Other segments of the NAHU family may be involved including the NAHU Education Foundation and the NAHU Industry Relations Committee We will work with our carrier partners and “sister” organizations to reach out and inform, educate, recruit, train and manage young professionals in our business We will work with our carrier partners and “sister” organizations to reach out and inform, educate, recruit, train and manage young professionals in our business

19 The Next Generation Our members need to tell us what they need and we need to respond Our members need to tell us what they need and we need to respond Our chapters need to work with us because all membership benefits start at the local level Our chapters need to work with us because all membership benefits start at the local level Young people are interested in honorable careers, making a living, succeeding and excelling in this business Young people are interested in honorable careers, making a living, succeeding and excelling in this business We need to seek them out, encourage them and show them the benefits of our profession and the association We need to seek them out, encourage them and show them the benefits of our profession and the association

20 Summary & Conclusion There is a future for the private health care and health insurance system – but it may look different from what we have today! There is a future for the private health care and health insurance system – but it may look different from what we have today! –Government & Private Sector initiatives will continue to refine and modify the system over time. –The cost of health care is becoming the “third rail” of public policy.

21 Summary & Conclusion Some in the public policy world will try to “divide & conquer” our industry by playing parties against each other: Agents, Providers, Insurers Some in the public policy world will try to “divide & conquer” our industry by playing parties against each other: Agents, Providers, Insurers –NAHU will continue to maintain a seat at the industry table to try and formulate alternatives that work.

22 Summary & Conclusion NAHU is expanding it’s membership tent to include professionals in other specialties including DI, LTC, Worksite and Senior products NAHU is expanding it’s membership tent to include professionals in other specialties including DI, LTC, Worksite and Senior products –Our local, state and national programs must meet these needs in terms of government affairs, media relations, membership, education, networking and professional development

23 Summary & Conclusion NAHU is formally pursuing a strategy to get younger agents involved in the industry and in the association NAHU is formally pursuing a strategy to get younger agents involved in the industry and in the association –A “Young Agent Task Force” has been formed and will formulate strategies to accomplish this task

24 Remember… Each of us needs to do 3 things: 1. Recruit at least two new members 2. Participate in 3 “Operation Shouts” 3. Donate at least $150 to the PAC This is the year to: “Make It Happen!”