Health Insurance — Forecast, Coverage and Costs
What is the history of Brogan, Reed, Van Gorder & Associates?
We’re a third-generation business. My grandfather started our firm….in the middle of the Depression. My grandfather went from door to door [selling insurance]. He graduated from [what is now] Ferris [State University] with a pharmacy degree, and then he decided he wanted to be in sales and was approached by Ohio National Life, which is a life insurance company out of Cincinnati that we still do business with. He started an agency for them…and then went on to become vice president of sales and worked out of the Cincinnati home office late in his career. At that time, George Guerre took over management of the agency [while] my father worked in sales until we transitioned to my management in 1990….I started in the business in 1985.
How big is BRV?
Our firm has two divisions: employee benefits, which is the area I specialize in, and financial planning and money management….We have 25 employees, with 11 in sales….Our firm has about 600 corporate clients…and probably somewhere in the range of 10,000 individual clients.
What evolutions have you seen in healthcare?
Right now, we’re in the midst of one of the largest changes we’ve seen in the employee benefits area, focusing on healthcare. Twenty-five years ago…we went through a major revolution in healthcare, introducing managed care. These were the first HMOs, PPOs, and point-of-service plans. It took us about four years to write our first HMO plan because it was such a drastic change….Today, we’re looking at a similar change called consumer-driven healthcare…with new, high-deductible plans and health savings accounts that go with the high-deductible plans. But it’s also really based on a wellness approach, so a lot more employers are focusing on how to keep their employees and their families healthier because the real solution to lowering [the] costs is controlling our utilization of [the plan].
What changes do you expect to see in the near future?
I think we’ll see major changes in healthcare over the next five years. The upcoming presidential election will have a significant impact on the direction healthcare takes. There have been ideas anywhere from single-payer systems, government-run healthcare, to employer mandates, like the plan that was just rolled out in Massachusetts….that mandates all employers provide health insurance to their employees; and for those that earn under a certain wage, there is government assistance to help pay those premiums….It’s a lot more complicated than that, but it’s really the other end of the spectrum…versus essentially a social system.
In both healthcare and retirement planning or financial planning, the future is going to require a lot more engagement from individuals now that the old defined-benefit pension plans are being phased out and the old…traditional…healthcare plans are becoming a thing of the past….Individuals are taking a greater interest in their own retirement investments and in their healthcare….you get a lot more access to data…on the hospitals and soon we will be able to [get data] on the providers, so people will have a lot more and better information, therefore being able to make better decisions in regard to their healthcare.
How do you control the ever-escalating costs of healthcare?
I’m passionate about healthcare and controlling [those] costs through delivering quality care….through a focus on…the quality that the care delivers, and people taking accountability for their own health. Quality outcomes, such as every infection you can prevent…reduce tens of thousands of dollars in current costs….For every heart attack you can prevent…that will reduce the costs…dramatically.
How do you think employers should tackle the problems of employee healthcare?
I believe in providing information and incentives to help people lead a healthier lifestyle….I don’t believe we should be mandating change in people’s lifestyles, but I believe we should be providing them with information about how to improve someone’s health status and opportunities for them to pursue those changes.
Are there any new products in your field that are generating a lot of interest?
One of the fastest growing new products in the marketplace is long-term care insurance. Employers are now starting to offer it as an employee benefit, sometimes on a voluntary basis, providing a base coverage and allowing employees to buy additional coverage if they choose. The 40- to 60-year-old age group is realizing that they’re being squeezed by the cost of sending kids to college and by the cost of managing their parents’ long-term care needs and would like to put themselves in a position that their children don’t take on the same burden….The employer-sponsored plans can be offered at 30 to 50 percent of the cost of an individual plan with similar benefits, so that’s why employers are now getting more engaged in the offering of that type of benefit.
To what do you attribute your company’s long-term success?
Being a third-generation business, obviously a lot of it is our name and reputation. When you’re buying a health insurance product or are dealing with someone’s retirement funds, it’s a relationship that’s built on trust.
Name: Gregory D. Brogan
Company: Brogan, Reed, Van Gorder & Associates
Title: Managing Partner
Education, BA, Finance & Marketing, Western Michigan University
Family: Married 20 years with three daughters
Hometown: East Lansing
Professional Activities: Sparrow Hospital Board of Governors and serves on the advisory boards for Blue Cross/Blue Shield, PHP and Cofinity (formerly known as PPOM)