Brokers, worried that their livelihoods are at risk of health law are pressing State legislators and Congress to protect and guarantee agent commissions have a new role in online marketplaces where people shop for coverage. Efforts are spawning political clashes between lawyers and brokers, as well as a debate about the proposed broker defenses will help people save money or increase premiums.
"Obviously, this is a time of nervous, brokers change dramatically," said Sabrina Corlette, a research professor at Georgetown University's health policy Institute, who is critical of my efforts. "They are doing everything they can to survive and evolve." Brokers warn alienating them could undermine the success of online insurance marketplaces and exchanges which will allow people to compare prices and benefits programs. Starting in 2014, small businesses and individuals can use the exchanges to buy policies.
In some of the country's legislature, bills from a broker gives agents the seats on the exchange Board, which sets the operating rules. Iowa, a bill that is getting attention and require the use of a broker when you purchase a policy assuring Commission broker substitution of less than 5 percent. A bill pending before the Minnesota legislature would require that anyone selling, soliciting or negotiating insurance for health care program be licensed by the State.
Other places are moving in the opposite direction. Maryland, district of Colombia, for example, are weighing bills that bar brokers from decision-making positions. Many States, including Virginia, do not set rules for real yet. At the national level, in the lobby, a task force of the National Association of Insurance Commissioners in preparing legislation that Congress exempt from broker commissions new rules require insurers to spend at least 80 percent of the money they collect premiums on medical care. Only 20 percent could go toward administrative costs and profits.
Insurers fail to meet the requirement of 80 percent must, by law, to give consumers refunds. Brokers say that the rule created a need for insurers to cut commissions to reduce administrative costs. Gary Cox, bshtrling broker, said insurers have been cutting commissions on 25 to 50 percent because of the new rule. "We've seen here jamming Virginia, God know elsewhere as well," he said. "We really saw people say hello, but would imagine there's going to be a significant percentage of brokers or agents who are going to say, ' I'm not going to play this game anymore." "
Ethan Rome, Executive Director of the Liberal Group health care for America now, said federal legislation drafted by the NAIC "will allow insurance companies to spend less on health care and more effective administration, profits, CEO salaries. Which means consumers will get raw deal. " There are 434,000 more insurance agents in the United States, according to the Federal Bureau of Labor Statistics; Most sell health insurance. The median annual income for a real estate agent in 2008 was $45,430. Fees are typically between 3 and 10 percent of premiums, according to the National Association of Health Underwriters.
Timothy Jost, a professor at the University of Washington and Lee University School of law and consumer representative to the NAIC, said most people do not need Anglo that buying a stock exchange policies will be simple. "Honestly, I don't think that there's going to be quite as much to do as there is now," he said.