Legislation to Be Introduced Exempting Commissions from MLR

jbage007

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This article from life and health insurance news was posted in a separate thread but the good stuff was on page 2 and appears to have been overlooked.

Here's an excerpt of the good stuff:

"Insurance agents and brokers have argued that producer commissions should be left out of MLR calculations. Customers are the ones who really pay the commissions, and insurers collect the commissions as a convenience to customers, producers say.


[Iowa Ins. Comm. Susan] Voss said she believes that agent commissions should be included in the amount of premiums reserved for medical expenses. Commissions on sales of health insurance policies “don’t go to the bottom line” of health insurers, but instead are fees paid by health insurers only to reimburse agents for the services they provide, Voss said.


Rep. Mike Rogers, R-Mich., is expected to introduce a bill exempting producer commissions from MLR calculations with bipartisan support in coming weeks. Rogers talked about his work on the MLR issue at the closing session of the NAHU conference."
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Howdy. Doody.

This is HUGE.

:1cool:
 
I still don't think they will raise the commission rates back up, atleast not the big guys, you will see the lower tiered carriers ramping back up. The big guys will still hunker down to see what is coming up.

If anything, they will do a retroactive bonus based on your book of business, or bigger app bonuses, whats UHC upto this week, $400 per app?
 
This article from life and health insurance news was posted in a separate thread but the good stuff was on page 2 and appears to have been overlooked.

Here's an excerpt of the good stuff:

"Insurance agents and brokers have argued that producer commissions should be left out of MLR calculations. Customers are the ones who really pay the commissions, and insurers collect the commissions as a convenience to customers, producers say.


[Iowa Ins. Comm. Susan] Voss said she believes that agent commissions should be included in the amount of premiums reserved for medical expenses. Commissions on sales of health insurance policies “don’t go to the bottom line” of health insurers, but instead are fees paid by health insurers only to reimburse agents for the services they provide, Voss said.


Rep. Mike Rogers, R-Mich., is expected to introduce a bill exempting producer commissions from MLR calculations with bipartisan support in coming weeks. Rogers talked about his work on the MLR issue at the closing session of the NAHU conference."
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Howdy. Doody.

This is HUGE.

:1cool:
Hot Damn, it looks like somebody else is coming around now!
Imagine that. This is HUGE and it will pass and O'bamer will sign it.
Time to get back to work fellas, dry those tears away and write business.
 
Andrews is a hard core dim. It typically irks me to even hear him talk. So, it blows me away that he was at the helm of this revolt......to protect us "blood sucking" agents.



Rep. Robert Andrews (D-N.J.), speaking to the National Association of Health Underwriters (NAHU) conference, criticized the rule for lumping in insurance salesmen with administrative costs.

“You’re not a waster of time and money,” said Andrews, the ranking member of the Education and Workforce Committee’s Health subpanel. “You’re a saver of time and money.”

Democrats and members of the Obama administration spent the past week trying to smooth over relations with insurance brokers in town for the NAHU conference.

House Dem rips new insurance rule - The Hill's Healthwatch


 
It would likely backfire and be just like travel agent commissions.
If a consumer WANTS the services of an insurance agent the pay an ADDITIONAL commission. But the consumer would have an option to bypass the agent and save money.
 
All I can say is be careful what you wish for.
Newby is absolutely correct. First, this has been discussed before and was swatted down without even a thought. I don't see a road to have this pass now. Second, as Newby said, its a way to put health agents on the road to extinction.

Personally, I disagree with MLR as a concept. Trying to weasel whats in and whats out seems like a broken method of fixing a broken system to me.

Dan
 
Just learned that our home office guy was one of 750 people who recently returned from a huge trip to DC lobbying members of Congress on MLR and other aspects of Obamacare that need "tweaking."

Lots of positive news.

Results pending.

But interesting how we're getting some negative/skeptical feedback here. Human nature at its finest.
 
I disagree with MLR as a concept.

I agree.

MLR never made any sense considering carriers price according to loss ratios and what the market will bear.

A carrier can have a favorable loss ratio (70% to pick a number) and still be the highest one on a spreadsheet. UHC (according to some) had a LR in that range and they have been competitive in pockets but apparently nothing consistent from state to state.

OTOH, a carrier with a high LR (say 90%) can often be the lowest price on the street.
 
But interesting how we're getting some negative/skeptical feedback here. Human nature at its finest.

I don't want to come across as negative, just want to point out that the wrong thing is being fixed. If you focus on the right thing, you'll have a much better outcome.

To me, this discussion is similar to heading for a cliff in a car that has a governer set to 50 MPH. Everyone is excited that someone has a plan to fix the governer, but is forgetting that the steering wheel is still locked. Going faster isn't going to solve the problem!!!! The cliff is still in front of us.

As an agent, steering clear of MLR entirely (avoiding the cliff) is more important to me. As long as MLR exists, no matter how commissions are counted, commissions will be lower. Pass through commission concept is an actual recipe for disaster. The outcome will be carriers will be able to sell the same policy for a lower price via a direct channel.

We need to fix the problem, not a symptom.

Dan
 
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