The National Association of Insurance Commissioners has created a task force to study how the federal Patient Protection and Affordable Care Act (aka health care reform) will affect agents and brokers. The task force is a response to the Department of Health and Human Services decision to not exclude producer commissions from the calculation of insurer medical loss ratios. The PPACA requires a least 80 to 85 percent of insurer premiums to pay for medical costs, leaving the balance for everything else, including profit and producer commissions.
The IIABA fought strenously to have commissions excluded from the calculation, fearing that including them will give insurers further incentives to reduce producer compensation. I expect that we will see this become part of the discussion after the new Congress convenes in January, as lawmakers look for ways to improve on the PPACA (despite the calls by some to "repeal and replace.")
I always thought the case for keeping agents and brokers involved in health insurance was simple to make. Just give any random member of Congress a page from his health insurance policy and ask him to explain what it means. If (when) he can't, this should be all the explanation he needs as to why producers have to be involved. And since they have to be involved, they should receive fair compensation for the expertise they provide. Congress should view insurance producers as a valuable resource for households and businesses, not as more hands trying to get their slice of the health insurance premium pie. When the health insurance exchanges come, some people will surely try to go it alone, without advice, and unfortunately they will get burned. That's when people will see the wisdome of consulting an expert, and that's why Congress should be doing all it can to keep producers in the process.
Sound off in the comments, and stay tuned.
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