President’s Corner – “Tempus Fugit”
My son attends a Jesuit high school in Kansas City where part of the curriculum includes a two-year course in Latin. While reviewing his first semester progress recently, I was reminded of my own experience in the same institution, nearly thirty years ago. I thought to myself, “Tempus Fugit – time flies. ”
The next day at the office, I received a phone call from an agent I had not heard from in ten years. (Tempus Fugit.) He had seen an article I had published in the Health Insurance Underwriter magazine and called to say hello.
We talked for quite a while, he reminded me of some things I had said in a National Underwriter editorial piece back in December of 1982 which had strengthened his resolve to stay in the business at a time when it looked as if the government was going to come in and take over his job. He thought the parallels between then and now were eerily similar. He said, “Paul, there may be agents/brokers out there today that are concerned for their future like I was back in ’82. Why don’t you repeat your remarks. Maybe you can reach somebody like you reached me and convince them that, as bad as things may look today, there is always a tomorrow and products to sell for those who will believe in themselves.”
In abbreviated form, here is that piece…
“Chicken Little is at it again. From the pitch of the scream of Frederick D. Hunt Jr. (Benefit Tax Seen as Killer of Health Plans, N. U., Dec. 1, 1982) it sounds as if this time the sky is truly falling.
Although I, too, share the concern of thousands in the employee benefits industry regarding intrusions by the Washington select on our “hallowed ground,” I find it difficult to make the quantum leap required to get from a proposal of “…benefits should be taxed to the employee or non-deductible for the employer…” to “…benefits as we know them could be destroyed…”
Don’t light the funeral pyre yet. Not only is this proposal far from being signed into concrete law in any form, but, even if it was, I for one happen to have more confidence in the abilities of the companies, administrators, and brokers to respond in a necessarily positive fashion to any such legislation. It is a matter of survival, something people in this industry have proven quite adept at over the past 90 years.
Frankly, a ceiling on deductions for contributions to benefits, or a tax to employees on contributions over these limits is not as world threatening as it seems. Unfortunate as it is that such action may be imposed from “outside” it may be the nudge the industry needs to keep it on the self-policing track it has already embarked on to ratchet the cost/benefit ratios back into line.
Already… self-corrective action in plan design such as higher deductibles, higher employee coinsurance payments, and direct cost-sharing of premium contributions by employees have brought utilization rates down measurably.
This in turn has had the effect of forcing efficiencies in the provider market as evidenced by hospital closings or mergers, and increasing formation of preferred provider organizations offering discounted fees in order to generate traffic. PPOs, a concept which was anathema to the medical profession as few as five years ago, are being touted as one of the strongest growth areas in the medical field. Insurance companies are responding to this trend by forming alliances with various PPO groups to take advantage of their mutual strengths.
The depths of talent and ability available to meet the emerging needs of this industry are just beginning to be explored. Of all instincts, the survival instinct is the strongest. And evolution is an ongoing process always challenging us to survive. If we will merely exercise our God-given talents, then this challenge docs not appear so threatening. And when it is all said and done, that chunk of sky will have hit at our feet with all-the impact of a chicken feather.”
If we continue to believe in our abilities, and if we are willing to apply these talents, we will look back in another five or ten or twenty years, having successfully dodged the slings, arrows, and falling chicken feathers, and say, “Tempus Fugit. “