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Life Health > Health Insurance > Health Insurance

Milliman: Insurers Hope to Cut Commissions

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Health insurers are hoping to control costs in 2011 by reducing expenditures on broker commissions.

Milliman Inc., Seattle, has reported that finding in a summary of results from a survey of about 60 carriers that serve large and midsize employer groups.

Milliman tries to get “apples to apples” group health price comparisons by asking carriers Caduceusto give price estimates for a group with specified demographics and a specified benefits package.

Increases in group health renewal prices for large and midsize plans could average about 10% for health maintenance organization plans and about 12% for preferred provider organization plans in January 2011, Milliman says.

A portion of the increases could be due to the Affordable Care Act, the federal legislative package that includes the Patient Protection and Affordable Care Act (PPACA), but Milliman did not quantify the effect of the Affordable Care Act.

Milliman did ask carriers to talk about the kinds of

initiatives they will be using to respond to the Affordable Care Act.

Carriers say they will try to cut broker commission payments, Milliman says.

Carriers also want to share more risk with providers, use more provider quality incentive programs, and give plan enrollees more information about provider fees, Milliman says.

Agent groups argue that they have been defending employers’ and individual health policyholders’ interests for years, and that new constraints on health insurance company administrative expenses built into the Affordable Care Act could lead to devastating cuts in health producer compensation.

- Allison Bell


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