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View: Agents should stay in the medical loss ratio. Unless...

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With all the changes brought about by the Patient Protection and Affordable Care Act (PPACA), I think hard working agents have been treated with disrespect for all they do for health insurance consumers. The buyers seem to generally be happy they have an agent to guide them thru the maze that individual health has become.

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So why are agent groups looking to extend the pain felt by our colleagues in supporting medical loss ratio (MLR) legislation removing us? I know that many seem to think that moving agents outside the MLR is a good idea, but I see it differently and I hope after reading this, you will too.

The entire issue here is ultimately about insurers meeting their MLR requirements under PPACA so that they don’t have to pay rebates to our clients. So to be clear, it’s about keeping more money in the pockets of the insurers, and somehow believing that this windfall will translate into some benefit for the agents. Who believes this theory, and why? I simply can’t figure out why some agent groups would care about helping these giant carriers make more money at their own expense.

If the carriers want the agents outside the MLR so they can make more money, then how about we get a guarantee of a floor of compensation in that legislation? Yes, I am advocating that we, as agents, support commission regulation to protect us from our carriers. They are the bigger threat to agents at this point, not the government.

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Think about it: In all of PPACA, there’s only one place where agents, as a vital part of the system and earning compensation for being so, are memorialized. That’s the MLR provision. If you remove agents from the MLR, then the entire law is mute on the role of the agent. At that point, you can say good bye to any agent commissions in any health plans under PPACA.

The two bills in Congress now, H.R. 2328 and S. 1661 are inappropriately named as the “Access to Professional Health Advisors” and “Access to Independent Health Insurance Advisors” acts. They should be called the “More Corporate Welfare to Big Companies” act. These bills will both destroy any chance of agents being paid for their services in the individual markets. Somehow, the carriers have influenced some “agent associations” that by helping the home office make more money is a positive for agents. Even though the agents will be paying that money to the carrier so that they don’t owe our clients rebates. Has the world gone mad?

I have a good friend and colleague who disagrees with me on several of my points here, but her argument is all about numbers. This isn’t about numbers, or charts, or numerators, or calculations using any formula. This is about intent for me. I do not trust our carriers, and neither should you. Their intent is to get rid of us and with PPACA they see the opening. They complain about losses as far as the eye can see. Using what formula? A political formula written by legislative staffs who wrote PPACA?

I’m looking at the annual reports of each major carrier. I have stocks in them and those stocks are doing very well, thank you very much. Carriers are making record profits, while individual plans have had exploding deductibles and out of pocket costs, with huge premium increases and reducing networks. Now they not only want you as agents to work harder, but to work for free. And pay them your commissions so they can avoid having to pay our clients rebates. Makes sense, if you’re a huge insurance company, I guess. Get a totally free sales and service force, and actually have that sales force pay you so you don’t have to rebate your overcharges to our clients.

I could go on and on about the other forms of corporate welfare that our carriers take from the taxpayers to keep their businesses sound, but there’s not enough column inches, so let me cut to the chase. If the carriers want agents removed from the MLR, agents should oppose it unless there is an amendment to these bills that guarantee a floor of commissions for agents nationally. We are the little guys, helping the other little guys. Clients get this now. Real access to agents mean those agents need to be paid for their work.

See also:

Agent to colleagues: Get the MLR bill moving

California broker to NAHU: Fight ‘abysmal state of affairs’


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