I just finished reading a LifeHealthPro.com article about Obamacare, and it hit me: Even LifeHealthPro.com reporters are missing the point.
The reporter talked about the questionable studies showing that health care costs more in the United States than in Europe, then focused on the Obamacare minimum medical loss ratio (MLR) issue, as if the effects of the Obamacare MLR provision on agent compensation were agents’ biggest concern.
The difference between health care costs in the United States and Europe is a red herring — a meaningless argument often used by liberals to obfuscate the discussion and make it appear there is something terribly wrong with health care in America.
The focus on the effects of the Obamacare minimum MLR provision on agent compensation is really just another red herring. Reporters seem to assume that the effects of the MLR provision on commissions is agents’ biggest concern about Obamacare.
The biggest concern I have is not my commission percentage, but the percentage of my clients who will be completely forced out of the health insurance market when premiums rise 200 percent or more next year due to Obamacare mandates.
The MLR provision doesn’t make sense in a competitive environment. Competition itself is bound to hold administrative costs to the lowest prudent, practical level.
But the most important point about the health insurance agent compensation structure is this: It isn’t the boogeyman that’s causing rising premiums.
It doesn’t matter (except to the writing agent) if the commission rate is 2 percent, 4 percent or 8 percent, when 80 percent or 85 percent of the premiums are being used to pay claims. The health care costs eating up the 80 percent or 85 percent of the premium dollar is obviously the factor driving total health insurance costs.
Unless someone figures out how to “bend the cost curve,” agent participation, or the lack thereof and what agents are paid is meaningless.
A meaningful topic to think about is the underlying health of the population.
We need to talk more about the fatter people who reside in a nation where obesity accounts for as much as 70 percent of chronic illness. Most of that obesity, and chronic illness, can be reversed or eliminated with diet and exercise. But we are a nation of pill poppers, especially anti-depressants which drive up the cost of health care more than any nominal commission paid to an agent.