MLR Killing Off Business, Hurting Consumers, NAIFA Survey Says
Agent commissions have declined dramatically since the medical loss ratio (MLR) provision of the health care reform law went into effect, forcing many agents to reduce their services to clients, consider charging fees for services they had been providing at no additional charge and in some cases, laying off employees and leaving the health insurance market.
That’s according to a survey by the National Association of Insurance and Financial Advisors (NAIFA) of 861 of its members who sell health insurance. Seventy percent of respondents who sell health insurance have seen a decrease in commissions.
Almost a third are ready to leave the market. The survey reports that 30% say that if commissions remain depressed they will stop selling and servicing individual health policies and 22% say they will stop selling all health insurance.
How’s it going in your area?
Full article by Elizabeth Festa in LifeHealthPro.
Not to worry. The new Health Benefits Exchanges offer generous grants to “Navigators,” community groups that the Obama administration coalition sees as a substitute for brokers.
They’re from the government and they’re here to help.
More job-killing regulations from the Administration.
In the past I would sometimes joke with my customers that I was just stopping by their office because I was a professional conversationalist! Now, I have to tell them I’m not kidding anymore, that this is really what I am and I’ll be sending them an invoice!!
Good post. Thanks for alerting us Greg.
It looks like the health insurance industry is really going to take a hit from the national healthcare law.
The idea of forcing insurers to provide value for their products sounds appealing for politicians; but it’s very shortsighted. Forgetting for the moment that the law interferes between the voluntary exchange between consumer and supplier. It also limits the type of health plans available by making some of the less profitable (high-deductible) plans impossible (or even less profitable) to sell.
I understand the requirements of the MLRs, but don’t understand how they affect the agents.
Yawn. Broker here; those who understand where the business has been going for years & years have ramped up business. MLR issues are a distraction, at worst.
Academic ideologues like Goodman & Herrick really don’t know what they’re talking about it, even though they talk about this market a lot
The death of insurance agents is like Mark Twain’s – a little premature. ObamaCare will be ruled unconstitutional. Government websites, federal “Navigators”, and Exchange “Ombudsmen” would never have worked – that is why they need to hire 17,000 more IRS agents to intimidate and penalize. Remember, insurance is sold and rarely bought. Stay tuned, June 28 is getting nearer and nearer.
Greg,
I stopped marketing individual and group health insurance about a year ago. Instead I focus on the senior market (Medigap and Long term care insurance.) My decision was based on the uncertainty of not knowing future compensation. Why spend time and money marketing and then having some government official (who I pay the salary for) deciding how I run my business when they have never done what we do?
The government is out of control We should start an Occupy HHS movement. Un-elected bureacrats are trying to run our lives and hurting the buying public
Civisisus is obviously not in the health insurance business, at least not in the small group market. Obviously the health insurance marketing person is financially squeezed when the carriers are forced into limits on returns. The first thing to go is marketing fees (which doesn’t particularly bother the carriers because if it is government edict all must comply and there is no longer a competition for attracting brokers). Consequently brokers cannot spend much time servicing these small groups.
Larger employer accounts are usually self funded and for the most part the broker (consultant) should be paid fees by the client instead if the insurance carrier. There are separate MLR issues that cause unique problems for stop loss carriers that serve these larger markets.
NAIFA is primarily made up of life/disability producers – those that are more tied to traditional life and retirement products.
The National Association of Health Underwriters are primarily small group producers/brokers who sell the bulk of health insurance policies via small group and individuals. They have well over 20,000 members and it would be interesting to see what percentage of their membership are looking to leave the health insurance arena.