Researchers say health insurers paid brokers $8.3 billion in commissions and other compensation in 2013.
The 2013 compensation total was down 1.1 percent from the 2012 total, and down 4.6 percent from the 2011 total, according to a paper written by Michael McCue and Mark Hall and distributed by the Commonwealth Fund.
McCue is a health administration professor at Virginia Commonwealth University, and Hall is a professor at Wake Forest University.
What Your Peers Are Reading
They included figures on health insurer broker compensation in a report on the Patient Protection and Affordable Care Act (PPACA) minimum medical loss ratio (MLR) system.
The drafters of PPACA included the minimum MLR system in an effort to push health insurers to hold down administrative costs. The system requires insurers to spend at least 85 percent of large-group revenue and 80 percent of individual and small-group revenue on health care and quality improvement efforts or else pay rebates.
See also: HHS: MLR rebate total falls again
The Commonwealth Fund has historically backed researchers who support PPACA and favor the idea of cutting health insurance distribution costs along with other non-medical health insurance system costs.
The issue of insurers’ spending on brokers “is significant because some industry observers expect that increasing MLRs will cause issuers to reduce the role of — or compensation for — independent brokers,” the researchers write.
The researchers also looked at insurers’ underwriting gains, or the percentage of premium left over after an insurer pays claims and takes care of broker expenses and administrative expenses.
For a look at more details from the researchers’ paper, read on.
2013 broker expense: $1.3 billion
2013 broker expense as % of premiums: 4.2%
2011 broker expense: $1.4 billion
2011 broker expense as % of premiums: 4.8%