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Insurance agents and brokers, afraid of being rendered irrelevant in the post-health reform world of simplified insurance shopping, are fighting for their very survival.
The agents want lawmakers' and regulators' support in getting the Obama administration to recognize their role in the federal insurance Web portal, which lets consumers compare coverage options online.
They've also been making their case to the National Association of Insurance Commissioners (NAIC), which is tasked with ironing out the details of many of the insurance market reforms required by the healthcare law.
"This issue is important for insurance regulators because we know that [agents and brokers] provide a valuable service," said Illinois Insurance Director Michael McRaith, a prime sponsor of a resolution "to protect the ability of licensed insurance professionals to continue to serve the public."
The resolution was approved overwhelmingly — with one abstention — by the NAIC Tuesday at its annual meeting in Seattle. It had 25 sponsors.
An early draft of the resolution, obtained by Politico, addressed specific issues the agents and brokers hope to see resolved in their favor.
It called, for example, for "federal policymakers to review the definition of the Medical Loss Ratio to enable agents to continue to provide these services." Agents have asked for regulators to ignore their commissions when calculating the ratio – the percentage of premiums that must go to medical spending rather than administrative costs — mandated by the healthcare reform law, arguing that failing to do so could put them out of business.
Insurance agents fight for survival in world after health reform
Article Source: TheHill.com- Enjoy this article? Help vote it up the 'Vine.
- Public Discussion (8)
Liberal activists, meanwhile, argue that protecting agents and brokers' bottom line makes no sense because the healthcare reform law greatly simplifies the insurance market.
"We think that rather than building in more layers and fees between consumers and their doctor, that we should look for ways to simplify the purchase of insurance so that individuals, families and small businesses don't need to rely on the help of this industry of middle-men," said Avram Goldstein, communications and research director for Health Care for America Now.
I am sorry for anyone whose livelihood is threatened, but this is a bigger issue than insurance agents survival. IMO, the transitional approach sounds fair.
- 2 votes
#1 - Mon Aug 23, 2010 6:42 AM EDTI agree with Carloz that its sad that someone may lose their jobs, but if the whole system wasnt so messed up with greedy people to begin with we wouldnt be having the mess that we have now. As it stands everyone wants to make money off of sick people or people who MAY become sick and that covers the whole system from the providers to the brokers to the insurance companies.
- 2 votes
#2 - Tue Aug 24, 2010 1:45 PM EDTAll insurance agents are not greedy and the average commission on a health insurance policy is between 1% and 3% MAX. We're not the ones taking the lion's share by any means. AND we do provide a valuable service.
When these policies start being offered by the government's mandate with mandated coverages, WHO is going to explain options to the uninformed? You think people are @!$%#ing NOW about exclusions and limitations - wait until they don't have anyone on THEIR SIDE explaining things to them!
- 2 votes
, WHO is going to explain options to the uninformed?
Sounds like a personal problem to me. If a person isnt intelligent enough to figure it out on their own. And of course by your posting you must be an insurance agent? And i didnt just say insurance agents were the only greedy ones. As I stated the whole system is full of greedy people.
- 2 votes
Freedom Writer - it's NOT a personal problem, it is a legitimate issue. When is the last time you read your insurance policy? Did you understand everything? Can you tell me what coinsurance is? How about explaining out of network co-pays. Do you really think that EVERYBODY is able to understand this stuff without having it explained to them?
Apparently nobody trusts insurance COMPANIES. Now, the agents (who actually advocate for the INSURED) are to be kicked to the curb as well.
Am I an insurance agent? Yes, for over 30 years now. Do I sell health insurance - NO. Why? Because it's too much headache for the tiny commission you actually earn.
And actually, you DID say that insurance agents were greedy. Read your own post.
- 2 votes
I didnt say that insurance agents were the only greedy ones. And yes I do understand my policy. I know all about in and out of network. I know all about deductible, coinsurance, maximum out of pocket, etc Its about reading comprehension which as evidenced by many who post here is a problem. Which is a personal problem not the problem of everyone or of insurance agents or insurance companies.
- 1 vote
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