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A call for change to protect brokers and agents

On a daily basis, I watch the insurance experts I work with handle crucial, time consuming issues for employees from all industries and levels. For example, if you have a complex medical situation and need an advocate to solve a challenge between a carrier and a provider, that’s when an agent’s service starts. An agency expert conference calls the insurance carrier and the physician to get it straightened out. Claims processed as out of network instead of in-network? We fix it. Explaining plans to employees because the employer can’t and the employees expect someone to make it understandable? We take time to do it.

How will this change? One of the most closely-watched aspects of the PPACA is a provision requiring insurers to spend a set proportion of premium dollars on patients’ care and quality-improvement efforts — 85% for large groups or 80% for individual and small-group plans. If an insurer doesn’t hit the mark with this “Medical Loss Ratio” (MLR), it has to refund the difference to consumers in a rebate. The MLR is a well-intentioned effort to keep health care administration very efficient.

However, fees and commissions paid to Brokers and Agents are included in the “Administrative” side of the MLR calculation. This will probably cause significant reduction in the size and type of fees paid to agents, which will then reduce the scope of agent and broker services.

But, there is a possible fix. Recently, the National Association of Insurance Commissioners (NAIC) voted to support a resolution urging Congress to amend the law “in order to preserve consumer access to agents and brokers.” The resolution also suggests that Health & Human Services (HHS) should take action to help agents, including putting a hold on some aspects of the MLR requirement and classifying some agent compensation as quality-related for MLR purposes. We’ll see.

What am I concerned about? In the individual market, agents will leave the business if commissions continue to be reduced. Larger brokers and agents will still have a future, either paid through the exchanges under the Navigator program or as “fee for service” advisers, like attorneys.

My big concern as an agent and broker is to have a system that is fair and consistent, one that serves the employers and their employees well as we all navigate the new world of health insurance.  At a time when advice and wisdom is needed, we need to amend the MLR rules and keep the brokers and agents on the job to help make the system as good as possible.
 

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