Cut from the middle on health insurance

If you own a business and want to save money on health insurance by cutting out the middle man and working directly with insurance companies — good luck.

Call most of the major insurance companies and they will politely take your company information, then hand you over to one of their “preferred” agents, who will add a commission of 4 percent to 5 percent to your annual premium.

Rocky Mountain Health Plans, headquartered in Grand Junction, is one of the few insurance providers that will deal directly with businesses, without an agent or broker.

Now consider the system that allows car owners to purchase auto insurance on the Internet. Go to websites for Geico, Progressive or Esurance and you can obtain a quote in less than 20 minutes. You can also purchase your policy immediately from your home computer.

Auto insurance for an individual isn’t the same as group insurance for businesses, of course. But the same principles should apply — plug in your business information, your employee data, the health history of your workers and your location. Then insurance companies could bid on the package you present.

A business has to prepare that same information for an insurance broker or agent, who then takes it to the insurance company for a quote, without adding apparent value to the data provided.

There are some websites that purport to offer quotes for business health insurance. But they simply take the same information mentioned above, then pass it on to authorized agents for insurance companies, who then contacts the business directly to provide a quote.

Additionally, the web-based insurance sites are hampered by the fact that there is still no interstate market for health insurance, even with all the changes coming as a result of Obamacare. Unlike auto insurance, where an individual can search for quotes from companies all over the country, a business owner or individual seeking health insurance only has access to those companies approved to do business in Colorado.

Lawmakers in several states — including Arizona, Nevada and Wyoming — are considering bills to change that for residents of those states. But if Congress really wants to reduce insurance costs, it should first open up insurance markets nationwide, setting guidelines for basic policies that could apply anywhere in the country.

And it should establish an Internet site that eliminates the middleman for businesses which have the capability to make insurance purchases on their own.

The insurance industry seems to be shrouded in secrecy, as if the products it offers are so complicated the average person can’t make an informed decision. Running a company is complicated. Buying insurance should not be.


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