What a ride it's been. The uncertainty has never been greaterfor the quality and pricing of health care in America.

What has remained the same is the foundation upon which qualitycare and cost reduction can be achieved. In the early 1990s HMOsbecame the plan that was going to save health insurance in America.Immediately following the 1992 elections, Hillary was going tosweep us all into a large government-run HMO model. Fortunately,this government take-over never saw the light of day.

Now here we are, 18 years later, marching down the same old roadthat will do nothing to control health care costs. In the mid1990s, legislation was passed introducing tax-advantaged medical savings accounts.Congress in their infinite wisdomchose to limit these plans to groups of under 50 employees, and asa result, they made little impact.

In 1998, I attended a continuing education presentation of morethan 300 participants at the DuPage County Health Underwriters andwatched a presentation on MSAs by Ron Dobervich. I decided, alongwith five other members, to discuss this new concept further. Ronmade so much sense that I really wanted to implement these plansfor my clients because it was so much more efficient for both theemployer and employee alike.

You must remember that the old pre-paid medical plans that arepurchased today, with prescriptionco-pays, and doctor office visits shield the employees fromunderstanding what the real costs are for these services. What wasalso disheartening was that if a group was truly healthy, theseplans never gave the group any money back for non-use and tended tostill raise their costs the following policy year.

In April of 1999, as a member of the Council for Affordable HealthInsurance, Ron was asked to go to Washington and report whateffect MSAs were having in the small group market. When he and twoother council members Harvey Randecker and Stuart Slonin returnedfrom Washington, they got together and decided there was a need fora trade association to provide educational services to agents andbrokers about these new plans called consumer driven health plansor CDHPs. Stuart had ties to a trade publication and Harvey gave110 percent of himself to launch the National Association of Alternative BenefitConsultants (NAABC).

In the early days of CDHPs, most insurance companies refused toprovide enough of a discount to make the plans effective. There wastoo much additional risk with the higher deductibles andinsufficient premium savings to provide the funding for the CDHPs.One of the best actuaries in the world on the subject is MarkLitow, of Milliman USA, Milwaukee, Wisconsin office. He hastestified before Congress on the initial set up of MSA plans andhas overseen the setting-up of a whole country's health plans, mostnotably South Africa's MSA plans that worked wonderfully for morethan 10 years until political upheaval destroyed the free marketthere.

Then in 2002-2003, came two major CDHP breakthroughs. First thegovernment gave clarity to medical reimbursement accounts, whichthey renamed health reimbursement arrangements and the second wasthe expansion of the medical savings accounts to all size groupsinto health savings accounts. This time the insurance companies gotit right and started applying the proper discounts to their CDHPplans.

As we all know, in real estate, it's location, location,location; For consumer driven health plans, it's education,education, education. What we are now giving the employee is abetter benefit (less out of pocket with a hard dollar maximum forRX costs) and all at a lower cost. What we had to overcome byeducation was the understanding of why the underlying insuranceplan had to be a "high deductible" catastrophic insurance policyand why it made sense to do it.

Where do we stand today? At the heart are two drasticallydifferent health care delivery models. One, which was just passedinto law, is predicated on utilizing top-down controls to managecost and access. These designs always increase cost and limitsupply. A short documentary on this can be viewed at www.onthefencefilms.com. It's called "DEAD MEAT," a 24-minute documentary about therationing of health care in Canada.

The other is based on the premise that the employee, whenproperly educated, incentivized and given total price transparency,will manage costs much more effectively that any governmentbureaucrat. CDHPs give real dollars to employees to better managetheir health care spending. A new price transparency system thathas just been developed now allows employees to compare costs inany PPO with any insurance carrier in the United States. Mostagents and brokers today are unaware that medical service costs forservices such as lab tests, X-rays, MRIs and CT scans provided bythe same physician within the same PPO can vary by as much as 500percent, depending on where the tests are performed.If you have asmall co-pay, who cares what the cost is - but if you have a stakein the cost savings you will be willing to go shopping. This newmedical concierge system does the price comparisons for you and anydealings with a change in facility with the MD is done by theservice. One call does it all. It is a total hands-off by theemployee, other than that first phone call.

CDHPs have been shown to save the employer between 12 percentand 20 percent conservatively in the first year and by adding theconcierge service, it lowers claims cost by an additional $600 peremployee per year. As an agent, I have no control over insurancepremiums, but I can control the designs. With these programs, Ihave been able to save my small to medium-size clients from $1,000to $3,000 per employee per year. Some of these companies are nowspending less on their health insurance plans than they did fiveyears ago - though you would never know it from the news media.

And most importantly, these savings didn't come at the expenseof the employee. The total out-of-pocket costs for employeesactually went down compared to their old plans. We started theNAABC to help educate agents and brokers on bringing the consumermovement to the marketplace and to do it from within our industry.Even with the passing of this recent legislation, our tradeassociation is still in the forefront of bringing better ideas toour customers and giving them better choices.

Since April 2002, NAABC has educated more than 2,300 agentsnationally through its Chartered Benefit Consultants (CBC)designation course. For further information on our tradeorganization and/or continued agent education, you can contactHarvey Randecker at 1-800-627-0552