About
Alan Katz is a past president of both the National and the California Associations of Health Underwriters. In 2003 NAHU named Alan the Health Insurance Person of the Year, awarding him that year’s Harold R. Gordon Memorial Award. He was named CAHU Member of the Year in 2000 and 2007.
Alan has long been a strong advocate for agents and the role they play in America’s health care coverage system. In California he represented agents during negotiations over California’s successful small group health insurance reforms (often referred to as AB 1672). Nationally, Alan testified before several Congressional committees while leading NAHU’s opposition to aspects of the Clinton Administration health care reform proposal. In 2007 Alan rejoined the CAHU Board as Vice President of Public Affairs to help lead the organization’s involvement in the health care reform debate kicked off by Governor Arnold Schwarzenegger.
In 2005 Alan co-founded and served as president of Insurance Neighborhood. Previously Alan served as a Senior Vice President at WellPoint, Inc., the nation’s largest commercial health insurer. During his time with WellPoint Alan led the company’s individual and small group sales team and its eDistribution technology initiatives. Before joining WellPoint, Alan led Centerstone, one of the nation’s largest general agencies. He has been a licensed insurance agent since 1983.
In 2007 he formed the Alan Katz Group which offers clients consulting, public speaking and research services with an emphasis on health care reform, sales strategies and public service. Based on a study spearheaded by the Alan Katz Group, Alan authored Trailblazed: Proven Paths to Sales Success, a book which identifies and explores the attitudes, practices and behaviors of successful sales professionals. His monthly column with Benefits Selling magazine draws upon the insights of this book to address ways brokers can manage the changes to their profession driven by health care reform.
Alan has a long history in public service. In addition to assuming leadership roles in a number of community organizations, he served as Chief of Staff to California Lieutenant Governor Leo McCarthy and as a member of the Santa Monica City Council. He has worked on numerous political campaigns, few of them successful. If having been a health insurance executive, a politician and a government official does not reflect a penchant for making questionable life decisions, Alan is also a lawyer and served as an investigating attorney with the United States Securities and Exchange Commission.
The Alan Katz Health Care Reform blog was launched on January 2, 2007 and earned two distinctions that year. In September, the St. Louis Post-Dispatch named it one of the five “health care blogs gaining attention in the virtual world” and in December the Sacramento Bee’s CapitolAlert.com added the site to its list of top blogs covering California politics and policy issues. In September 2008 RNCentral.com cited the blog as one of the “100 Best Health Care Policy Blogs” while LexisNexis named this site one of the “Top 50 Blogs for Insurance.” Employee Benefit Adviser magazine featured Alan and the blog in its February 2011 cover story concerning social media.
None of this means his meanderings are worthwhile, but it makes his parents proud.
The Alan Katz Health Care Reform Blog 
Adam said
Hey Alan –
I know that the president just recently signed the 1099 repeal into law however, I’m curious if you’ve come across the Free Choice Voucher repeal that was included in the appropriations act that recently passed to keep the gov’t funded (temporarily). Can’t seem to find anyone talking about this although I believe it’s another big win for small businesses (and large biz too for that matter). Employers no longer have to track employee’s contributions as a share/% of their income nor provide vouchers for the exchange…this would surely decrease potential adverse selection!
John said
Hi Allen,
Discrimination or Monopoly or Both?
I’m a little upset that I do not have the right to choose where I would like my administration for a small group health plan to come from. Recently I read over RAF specials eligibility criteria and found that Aetna will only allow a discount to the RAF of a new group ” when using the Aetna HealthFund HRA.”
Why is that? If there are other Administration Firms out there abiding by Aetna’s regulations, should it really matter where the admin comes from? Do you think they are trying to push Administration Firms out of the market? and lastly is it legal to give one group a special and not another on a plan that is within regulations but with a different HRA administration firm?
I know the differences between the two administration firms and would like to use an administration firm I am more familiar with and is here in Ca.
Any response would be appreciated….
Angie said
Hi Alan: thought you should know that BCBS of Georgia just cut my monthly income by $3000. Guess I will have to fire an employee or sell my house. And that is only the first company we have heard from. They are hitting my existing block of business, which we spent 10+ years building for them. There are agents here that are much more invested in BCBS than we are since their rate increases have been pretty bad over the past few years so I am in better shape than some. Your thoughts?
bett martinez said
Alan, Just left a phone message for you as well:
And what are the Health Underwriters doing to help the broker community? Raising their membership fees is all I see.
IF it were the teachers or nurses having their pay rates cut – some by 50% – there would be blood in the streets, right?
Why do we have associations, and yet, we have a lousy image with the public.
Recently on Yelp! a client published a soliloquy about the service I had performed on her behalf, ending with “…and best of all, her services are free to me – paid for by insurance companies!” Why isn’t that fact made more clear, how valuable we are to all concerned, the public, the providers, as well as the payers – ie insurance companies.
HEALTH UNDERWRITERS ARE YOU LISTENING?!
John Elizondo said
Hi Alan,
Can you answer this question for me. As I understand it, after 2014 employers will only be incentivized for providing coverage if they use a shop exchange plan. Is this a true statement?
Alan said
Hi John. Yes, there are incentives available to employers and individuals that are only available if coverage is obtained through an exchange. Whether these incentives will drive many employers into the exchange is open to some debate (and, now that you bring it up, something I’ll do a post on soon). For what it’s worth, I think there’s a possibility Congress may consider making these incentives available outside the exchange. Doing so would be a longshot, but it is a possibility.
thincaboutit said
HEALTHCARE REFORM PARODY FROM PARODY & SON
All this bickering and bitterness over healthcare reform is enough to make you scream.
But we’d rather sing about it. Think of it as a “Parody Option.”
Please check out “Healthcare Fighting (Kung Fu Mix)” at http://www.youtube.com/watch?v=8nc1VwJOb9Y
For additional commentary and nonsense, go to the Parody & Son Blog at parodyandson.blogspot.com or the Parody & Son Group on Facebook. Feel free to post, broadcast or just pass around. I also have a bleeped MP3 available if you’re interested, but didn’t want to overload your mailbox.
If the battle over healthcare reform is making you sick to your stomach, our latest musical parody is just what the doctor ordered…
Bruce and Ross Hopman
(a.k.a. Parody & Son)
Parody & Son – Masters of Musical Mockery
Follow parodyandson on Twitter.
Tim, Las Vegas, NV said
Alan,
I have posted a series of videos on YouTube that detail my plan for Healthcare Reform. I would love to get an agent’s perspective on the plan. The link for the first video is Tim’s Healthcare Reform Plan Video 1.
Marcelo said
Alan, I would enjoy hearing your thoughts on this great article. What would happen to US HMOs if their admin costs shrank to 4%? Why can’t this happen?
5 Myths About Health Care Around the World
By T.R. Reid
Sunday, August 23, 2009
As Americans search for the cure to what ails our health-care system, we’ve overlooked an invaluable source of ideas and solutions: the rest of the world. All the other industrialized democracies have faced problems like ours, yet they’ve found ways to cover everybody — and still spend far less than we do.
I’ve traveled the world from Oslo to Osaka to see how other developed democracies provide health care. Instead of dismissing these models as “socialist,” we could adapt their solutions to fix our problems. To do that, we first have to dispel a few myths about health care abroad:
1. It’s all socialized medicine out there.
Not so. Some countries, such as Britain, New Zealand and Cuba, do provide health care in government hospitals, with the government paying the bills. Others — for instance, Canada and Taiwan — rely on private-sector providers, paid for by government-run insurance. But many wealthy countries — including Germany, the Netherlands, Japan and Switzerland — provide universal coverage using private doctors, private hospitals and private insurance plans.
In some ways, health care is less “socialized” overseas than in the United States. Almost all Americans sign up for government insurance (Medicare) at age 65. In Germany, Switzerland and the Netherlands, seniors stick with private insurance plans for life. Meanwhile, the U.S. Department of Veterans Affairs is one of the planet’s purest examples of government-run health care.
2. Overseas, care is rationed through limited choices or long lines.
Generally, no. Germans can sign up for any of the nation’s 200 private health insurance plans — a broader choice than any American has. If a German doesn’t like her insurance company, she can switch to another, with no increase in premium. The Swiss, too, can choose any insurance plan in the country.
In France and Japan, you don’t get a choice of insurance provider; you have to use the one designated for your company or your industry. But patients can go to any doctor, any hospital, any traditional healer. There are no U.S.-style limits such as “in-network” lists of doctors or “pre-authorization” for surgery. You pick any doctor, you get treatment — and insurance has to pay.
Canadians have their choice of providers. In Austria and Germany, if a doctor diagnoses a person as “stressed,” medical insurance pays for weekends at a health spa.
As for those notorious waiting lists, some countries are indeed plagued by them. Canada makes patients wait weeks or months for nonemergency care, as a way to keep costs down. But studies by the Commonwealth Fund and others report that many nations — Germany, Britain, Austria — outperform the United States on measures such as waiting times for appointments and for elective surgeries.
In Japan, waiting times are so short that most patients don’t bother to make an appointment. One Thursday morning in Tokyo, I called the prestigious orthopedic clinic at Keio University Hospital to schedule a consultation about my aching shoulder. “Why don’t you just drop by?” the receptionist said. That same afternoon, I was in the surgeon’s office. Dr. Nakamichi recommended an operation. “When could we do it?” I asked. The doctor checked his computer and said, “Tomorrow would be pretty difficult. Perhaps some day next week?”
3. Foreign health-care systems are inefficient, bloated bureaucracies.
Much less so than here. It may seem to Americans that U.S.-style free enterprise — private-sector, for-profit health insurance — is naturally the most cost-effective way to pay for health care. But in fact, all the other payment systems are more efficient than ours.
U.S. health insurance companies have the highest administrative costs in the world; they spend roughly 20 cents of every dollar for nonmedical costs, such as paperwork, reviewing claims and marketing. France’s health insurance industry, in contrast, covers everybody and spends about 4 percent on administration. Canada’s universal insurance system, run by government bureaucrats, spends 6 percent on administration. In Taiwan, a leaner version of the Canadian model has administrative costs of 1.5 percent; one year, this figure ballooned to 2 percent, and the opposition parties savaged the government for wasting money.
The world champion at controlling medical costs is Japan, even though its aging population is a profligate consumer of medical care. On average, the Japanese go to the doctor 15 times a year, three times the U.S. rate. They have twice as many MRI scans and X-rays. Quality is high; life expectancy and recovery rates for major diseases are better than in the United States. And yet Japan spends about $3,400 per person annually on health care; the United States spends more than $7,000.
4. Cost controls stifle innovation.
False. The United States is home to groundbreaking medical research, but so are other countries with much lower cost structures. Any American who’s had a hip or knee replacement is standing on French innovation. Deep-brain stimulation to treat depression is a Canadian breakthrough. Many of the wonder drugs promoted endlessly on American television, including Viagra, come from British, Swiss or Japanese labs.
Overseas, strict cost controls actually drive innovation. In the United States, an MRI scan of the neck region costs about $1,500. In Japan, the identical scan costs $98. Under the pressure of cost controls, Japanese researchers found ways to perform the same diagnostic technique for one-fifteenth the American price. (And Japanese labs still make a profit.)
5. Health insurance has to be cruel.
Not really. American health insurance companies routinely reject applicants with a “preexisting condition” — precisely the people most likely to need the insurers’ service. They employ armies of adjusters to deny claims. If a customer is hit by a truck and faces big medical bills, the insurer’s “rescission department” digs through the records looking for grounds to cancel the policy, often while the victim is still in the hospital. The companies say they have to do this stuff to survive in a tough business.
Foreign health insurance companies, in contrast, must accept all applicants, and they can’t cancel as long as you pay your premiums. The plans are required to pay any claim submitted by a doctor or hospital (or health spa), usually within tight time limits. The big Swiss insurer Groupe Mutuel promises to pay all claims within five days. “Our customers love it,” the group’s chief executive told me. The corollary is that everyone is mandated to buy insurance, to give the plans an adequate pool of rate-payers.
The key difference is that foreign health insurance plans exist only to pay people’s medical bills, not to make a profit. The United States is the only developed country that lets insurance companies profit from basic health coverage.
In many ways, foreign health-care models are not really “foreign” to America, because our crazy-quilt health-care system uses elements of all of them. For Native Americans or veterans, we’re Britain: The government provides health care, funding it through general taxes, and patients get no bills. For people who get insurance through their jobs, we’re Germany: Premiums are split between workers and employers, and private insurance plans pay private doctors and hospitals. For people over 65, we’re Canada: Everyone pays premiums for an insurance plan run by the government, and the public plan pays private doctors and hospitals according to a set fee schedule. And for the tens of millions without insurance coverage, we’re Burundi or Burma: In the world’s poor nations, sick people pay out of pocket for medical care; those who can’t pay stay sick or die.
This fragmentation is another reason that we spend more than anybody else and still leave millions without coverage. All the other developed countries have settled on one model for health-care delivery and finance; we’ve blended them all into a costly, confusing bureaucratic mess.
Which, in turn, punctures the most persistent myth of all: that America has “the finest health care” in the world. We don’t. In terms of results, almost all advanced countries have better national health statistics than the United States does. In terms of finance, we force 700,000 Americans into bankruptcy each year because of medical bills. In France, the number of medical bankruptcies is zero. Britain: zero. Japan: zero. Germany: zero.
Given our remarkable medical assets — the best-educated doctors and nurses, the most advanced hospitals, world-class research — the United States could be, and should be, the best in the world. To get there, though, we have to be willing to learn some lessons about health-care administration from the other industrialized democracies.
T.R. Reid, a former Washington Post reporter, is the author of “The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care,” to be published Monday.
Bigdaddyota said
I am stunned – their are really people in this beautiful Country who know about they are going to write and they do it with great factual driven mood without any additional myth build up.
In fact, I would think for many Rep’s out there and also Dem’s now or soon take a journey and look up the system in Germany or in France or in Japan. Be open minded and stick your perceptive thinking to your luggage – which you than better forget to give up at the AP.
Look at the these Systems and learn, learn the private Insurance companies in Germany still can make money with out such idiotic methods as described in T.R. Reid’s article. Learn about to build a system fair enough to us as humans – without paying ridiculous “malpractice insurance premiums” because we have our legal system not under control and still have to accept absolutely exaggerated claims about malpractice which so will defeat the whole system.
Learn in Germany why “Techniker Krankenkasse” or “Barmer Ersatzkasse” at first serve the people and then themselves in an cultivate way and not as robbers like we have to accept here because it’s all about “the market will drive it”, no, the market don’t make it right as also in the Health Care market as still in the financial system, greed is protrude and a permanent ‘Gringo’ when stakeholders have to get their feed, even sometimes a bloody feed.
Don’t get me wrong here, but the current system is not worth the Country it is installed in and the people of this Country deserve more likely the outcome of Mr. Obama’s Health Care reform as anything else what I have heard and read about or seen so far. And it even goes not far enough and could do way better by implementing what other systems have tested now for quite some while and with such implementations serve us, the people extraordinary better.
Thank you for your time and good luck Alan with your Blog!
Phil Daigle said
Thank you very much, Alan, for all the selfless things you do to further the cause of health insurance agents and brokers.
Lynn said
Reform provides security and stability to those with or without coverage:
1. Ends Discrimination for Pre-Existing Conditions: Insurance companies will be prohibited from refusing you coverage because of your medical history.
2. Ends Exorbitant Out-of-Pocket Expenses, Deductibles or Co-Pays: Insurance companies will have to abide by yearly caps on how much they can charge for out-of-pocket expenses.
3. Ends Cost-Sharing for Preventive Care: Insurance companies must fully cover, without charge, regular checkups and tests that help you prevent illness, such as mammograms or eye and foot exams for diabetics.
4. Ends Dropping of Coverage for Seriously Ill: Insurance companies will be prohibited from dropping or watering down insurance coverage for those who become seriously ill.
5. Ends Gender Discrimination: Insurance companies will be prohibited from charging you more because of your gender.
6. Ends Annual or Lifetime Caps on Coverage: Insurance companies will be prevented from placing annual or lifetime caps on the coverage you receive.
7. Extends Coverage for Young Adults: Children would continue to be eligible for family coverage through the age of 26.
8. Guarantees Insurance Renewal: Insurance companies will be required to renew any policy as long as the policyholder pays their premium in full. Insurance companies won’t be allowed to refuse renewal because someone became sick.
Rick Hertzenberg said
Alan…
It would seem that there is considerable waste in the Medicare program…. why would we want government to have a bigger role in healthcare?
I would support the idea of government defining the coverage and the exclusions. Let the insurance companies continue to provide coverage, but have the government make score cards available to the public regarding cost and service rankings of insurance companies. Once the coverage and exclusions are standardized, the only thing left is service and price. This type of competition will force insurance companies to compete in order to get the best scores on those two issues.
Also, it may be time for insurance company regulation to be a federal issue, not a state issue.
I am amazed that Barack Obama is willing to cowtow to his attorney friends regarding not setting limits on malpractice claims. Obama takes care of his friends!
LIZ said
Please go to http://www.barackobama.com/index.php and host your own healtcare event. IT IS VERY IMPORTANT. Everyone has its own agenda, alternative medicine, mandate healthcare, you name it everyone has it. PLEASE RAISE YOUR VOICE AND MAKE YOUR POINTS CLEAR! SO THE SENATE APPROVES MANDATE INSURANCE FOR ALL. MAKE SURE TO DO IT BETWEEN JUNE 6 AND JUNE 12. HURRY, AFTER THIS A BILL WILL BE PASS.
Taylor Gaddy said
When you say one of the points is to have affordable health care everyone, do you think that includes people with pre-existing conditions?
Alan said
Yes. Democrats and Republicans seem to be in agreement that, whatever reforms emerge, Americans with pre-existing conditions must be able to obtain coverage. The trade-off for this is likely to be that everyone needs to obtain coverage. Otherwise, the resulting adverse selection (people waiting until they are sick or injured before buying coverage) would make health insurance unaffordable.
James Thornton said
Yes, adverse selection would cause rates to rise dramatically but.. If a government can give you everything you want, isn’t it also big enough to take everything you have? Or,
If a government can make you buy insurance, isn’t it big enough to make you buy it from the gov’t?
The only reason a ‘public option (joke)’ didn’t fly THIS TIME is because the opposition stopped it so don’t for a second think that ‘they will not try again until they get it!’
James Thornton said
I just wanted to clarify, the above comment appears to be written by another James Thornton, not THE James Thornton many of you are used to giving thumbs down to on Alan’s excellent blog.
Or perhaps someone is trying to put trendy anti-government jargon in my mouth.
If this is the case, please note that I have managed to spit it out and am using Listerine to sterilize my buccal membranes!
Alan said
Who’d a thunk it … there are two James Thornton’s commenting on this blog.
TN Insurance Agent said
I like the idea, though I think it’s part of a solution. It only increases the cost of one area to decrease the cost in another. Since life insurance premiums are so much cheaper than health premiums, the costs of continuing treatment could very easily cost more than the payout on a life insurance claim.
My two cents on small group and private health plans? Combine plans, diversify among specialized products with different premium price adjustments (attained age/issue age), bundle them, and mitigate the premium increases. For example, take a single health plan with a low deductible and you get a high monthly premium. Lower that monthly premium for a higher deductible and co-insurance, then slide in an issue age medical gap plan to cover the deductible and co-insurance amounts. Specialize cancer coverage in a separate plan. Bundle Life Insurance in the package that includes an Accelerated Benefits Rider. This lowers the costs, because it spreads the risks among different plans, maybe different companies if acting as an independent agent.
This is discussed in more detail in this article:
http://www.edgeoninsurance.com/health-insurance-tips-and-strategy/24-insurance-tips-and-strategies/19-how-combining-health-plans-saves-money
While this mostly applies to self-employed individuals and families, the concept is based in the principle that health insurance is the “sharing” of financial risk.
john said
Currently Health insurance companies make their most money when you die suddenly, after paying all your premiums and not going to get preventative care. This motivates them to put up barriers to you bothering to go to the doctor, high co-pays, calling for permission, high deductibles …
However that motivation could be eliminated if Health Insurance companies were also responsible for your Life Insurance. (like $250,000 or $500,000?)
Suddenly Health Insurance companies would want you to live longer, go to the doctor and get preventative care, and would not put barriers such as high co-pays, calling for permission first, and high deductibles in your way; they instead would be calling you to schedule your next appointment!
The extra cost of this Life Insurance to the individual could then be almost eliminated by having a different organization then pay your health insurance a monthly amount for the privilege of being a beneficiary of your Life Insurance. (This organization would not be allowed to be the Health insurance Company, its subsidiary or parent nor a re-insurer of life benefits with the health insurance company.)
Any Comments / Support for this idea? (I am calling it the “Gold Insurance Reform Proposal”)
John Swain, CEBS, CFP, RPA said
Alan,
I wrote a great deal of AB 1672 business and I applaud that law. I’d like to see that law changed to cover sole proprietors and employers up to 500 employees.
I believe expanding AB 1672 would be good for the following reasons:
• The rates under AB 1672 have been stable.
• The plus or minus 10% underwriting factor is fair.
• Age banded rates controls the risk of changes in the group demographics and fairly charges the group for the medical risk.
• The employer can better control costs by defining the contribution per employee.
• The best part of the small group market in California is that we could offer up to 20+ plan designs, which is the choice the Californians want.
• By offering a wide selection of plan designs, the employer can budget a controllable cost and allow employees to take responsibility for their decisions.
• The defined contribution approach with a wide selection of plans allows the employer the freedom to concentrate on the employer’s core competency.
• Employees become more educated about the choices they have.
• Groups that have more than 50 employees often have challenges obtaining coverage, especially if the group has one or two high claim medical conditions or the group is in an industry the insurance carriers don’t want to cover.
• The platform already exists with the carriers, so mandating the change would be easy.
Of course, the success of any plan comes down to education and communication. Next to a mortgage, health care costs are the single biggest expense families have and they need to understand the big picture. The professional broker today is more a financial planner and educator than a sales person.
I hope California will consider expanding the choices employers have in offering coverage to coworkers, by expanding a law that is already working.
Matt said
Regarding Joe and his distaste for brokers. I disagree with pretty much everything you said. Brokers, just like people, have all types of qualities and personalities. Some brokers are amazing and really care about the client. I work for an agent like that. She doesnt care at renewal time if her commission is cut. She only cares about the client getting the right insurance plan. I disagree with you Joe, completely. You are lumping every Insurance Broker together and that just doesn’t work. Find a broker that will work for YOU.
Brokers are not “just the middle man”. Sad that people even think like that. We provide a very necessary education into this confusing business.
Our expertise and skills are deserving of a salary. Sorry Joe.
Joe said
I tried to read many of your posts but found that you seem to be trying to be the Fox News, of the internet, their so called “fair and balanced” reporting. You fail, of course.
Many of your headings are laughable, one in particular about how agents will help
the patient deal with the Insurance Company. My experience with agents is that you can’t get them on the phone once you sign the policy, their off to their next sucker.
Agents along with Insurance Companies are the problem with health care. They are just middle men, who want a cut of the action, and every year they want a bigger cut. They do not hold the client’s needs in much regard, only how much money they can get out of them. If they have the nerve to actually use their Insurance, watch out. They will do everything to make it difficult to collect.
Their only concern is themselves, making as much money as they can with reckless abandoned, so they can be the darling on Wall Street, that is what they live for, well hookers, golf and alcohol too.
Rita Gibson said
Alan,
Keep up the good work. I read your blog almost daily and hope and pray for the best. This is a very difficult time for us in the insurance business. I worry about my future business income and clients premiums. The problem, as you outlined, is that the legislature wants to ‘do something’ and they may do something adverse to our industry and clients just to ‘do something’ to say they ‘reformed health care’. What a mess. Something good may come of this mess, but I can’t imagine it at this point.
Kathy Blicha said
Alan
Just wanted to let you know that I was at your Fresno Presentation. You were brillant as always……. I have taken the liberty of printing the CAHU presentation and is going to be handing it out to all the producers in our office. Not only do we have a health department, but also comercial and personal lines. I think those producers should know what we in the heath area is facing…..who knows what could hold for other lines as well. Again it was an honor hearing you speak! Great Job! Have a Great Week! Blicha