Posts Tagged → statewide school insurance pool
MN edges closer to public school insurance monopolistic deal
Local hometown insurance agents better hold tight or prepare to see their businesses either damaged to eliminated entirely, if Minnesota DFLers get their way. That’s because a bill that proposes eliminating most competitive agents from the loop of bidding for school district health insurance has taken another step forward, winning approval today in the Minnesota House.
While hometown insurance agencies in outstate Minnesota have historically had to submit to a bidding process to win the health insurance and other insurance business of their local school district, the bill being considered would cut local bidding out of the process entirely, awarding only a handful of six “superagents” the vast bulk – if not all – of the Minnesota public school district insurance contracts in the state.
While family policies and private business group policies will still be up for grabs, this power-grab by state officials to eliminate true competition in the school insurance industry. While the surviving policies will be marginally more affordable, what is certain to suffer are areas like personalized customer service, the “hometown touch,” and the ability of local agents to customize policies to local district needs.
While most people believe the insurance business is a red-carpet-lined path to easy street, the agents who do well only do so after surviving several years – sometimes a decade or more – that it takes to build up a new practice and gain a reputation for dependability and customer service. It’s not a get-rich-quick industry with every agent owning Tuscany Villas that they visit six times a year.
In place of local agents and options will be a sparse plate of six benefits package options that most education professionals will be restricted to. And in the final analysis, the loss of all those education contracts could be enough of a hit to put a significant number of independent insurance agents and other small, local insurance offices, out of business for good.
A plan only Dems and unions could love
The Minnesota State Senate today passed a bill that would align all of Minnesota’s public school districts – representing over 200,000 employees statewide – into a single “insurance pool” that would put the state in control of every teacher’s health insurance options.
It’s a plan pushed by Democrats and teachers union reps, and a plan only lobbyists for big insurers could love. What this does, in essence, is take the small-town insurance broker out of the picture in bidding for the insurance contract of local school districts. Instead, all that money will be siphoned out of local insurance reps and be redistributed to a handful of super-brokers with the right ties in Saint Paul.
Of course, don’t count on the liberal media to tell you that side of the story; the Twin Cities papers are all making it sound like a great idea that will save everyone money, especially smaller school districts like the one I went to as a kid in southern Minnesota. In small districts like that, there are brokers whose livelihood depends on bidding on and winning school district insurance contracts each year, and once this legislation takes effect, that revenue will be grabbed away for good.
Don’t let the libs tell you they’re in favor of small business; this latest bill is about to put a lot of small business insurance agents on the verge of failure, once it all takes effect on 2009. Sure, the legislation is cumbersome and hard to understand, and you might need some financial consolidation software to even get a grasp on what it all means, but the bottom line is that the savings for school districts will come at the cost of the livelihoods of many insurance agents, who will soon be cut out of the bidding process entirely. Call it the Local Insurance Agent Unemployment Act of 2007!
