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Life Health > Health Insurance

Agents ponder health comp cut response

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Jeff Miles says health insurance agents and brokers should talk to antitrust lawyers and find out what they can do about the recent wave of compensation cuts, rather than sitting still and assuming that they can’t do anything.

Miles, a former president of the California Association of Health Underwriters (CAHU) who sells coverage mainly in group market, says reports about insurers responding to concerns about the individual medical business by suddenly slashing commissions have concerned him and colleagues.

Up till now, for example, the National Association of Health Underwriters (NAHU) has been so careful about antitrust policy that NAHU members can’t talk about the subject on NAHU message boards, Miles said.

“It seems to me we should talk about that,” Miles said in an interview. NAHU representatives were not immediately available to comment.

Traditionally, insurance agents have faced fewer antitrust issues than medical doctors, hospitals or real estate agents. In 2005, for example, David Barry suggested at a Federal Trade Commission (FTC) conference that the insurance industry is much better, from a competition perspective, than the real estate agent industry. 

In 2002, Barry said, the need for access to the National Association of Realtors’ Multiple Listing System (MLS) led 99 percent of real estate agents to join that group, while only 16 percent of life agents belonged to the National Association of Life Underwriters.

The FTC and its parent, the U.S. Department of Justice, have cracked down hard when doctors and hospitals have tried to team up to keep insurers from driving down health care prices. Researchers have noted that one of the goals of PPACA’s drafters was to reduce U.S. health coverage distribution costs.

But exchanges seem to be learning about agents’ ability to get people enrolled in health coverage. In January, for example, managers of Covered California said 46 percent of new enrollees brought in from Nov. 15 through Jan. 12 had come in through agents.

Managers of Connect for Health Colorado reported that, through Jan. 31, 2015, 37 percent of their submitted 2015 enrollments were coming in through brokers, up from 31 percent during the 2014 open enrollment period. The number of certified exchange brokers fell 17 percent, to 1,313, but the brokers had already submitted an average of 38 exchange applications each by Jan. 31, up from an average of 30 applications per broker for the entire 2014 open enrollment period.


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