HUGE? NAIC Task Force Votes in Favor of Brokers

[pahealthquotes]

From NAHU this afternoon:


I want to know who the 20 that hate us are and who the 5 that couldn't care less about us are!

just look at the Blue States and thats your answer
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This is defiately good news..something we havent heard in a long while. I'm optimistic our commissions can be removed from MLR..

 

[Yagents]

In AZ, a red state, voted NO.

Be careful what you ask for, I don't see this as a positive. See my other comments in the thread. This in no way will raise our income, only pad the insurance companies pockets, and leave it up to us to fight for our right to an income.

Can someone connect the dots, do the math, and tell me how this is helpful for us?

 

[Dave020]

In AZ, a red state, voted NO.

Be careful what you ask for, I don't see this as a positive. See my other comments in the thread. This in no way will raise our income, only pad the insurance companies pockets, and leave it up to us to fight for our right to an income.

Can someone connect the dots, do the math, and tell me how this is helpful for us?

Because it will allow carriers to go back to 20/10 on IFP (/sarcasm).

CA insurance commissar stated pretty much the same thing. The only thing I really disagree with (from CA) is that the agent community will continue to be "available" long-term.

Look, everyone has been writing for 11 months on enhanced FYC. Overall 12-15% roughly so the drop in comp has not really been felt....yet!

I believe the rubber will meet the road (mass defections) in the spring of 2012 when the business drops to the 5/4 level on FYP.

Imagine the agent sees he/she submitted 300k in January and earned $12K commission but by April is submitting $350k a month an earning $8k. And it's starting to drop further every month thereafter. That is what is going to happen and when it does reality will set in.

 

[Yagents]

Dave020, what changes are coming in Spring 2012?? How do you know when and what comm will be changing to.

See quote below that backs my similar belief.


Consumer Reports magazine president Jim Guest argues in an opinion piece for the Star-Ledger (11/23) that "by the NAIC's own estimate, $2 billion in rebates to consumers would be slashed by more than half. And there is no guarantee that the brokers will benefit from this change -- nothing requires insurers to pass this windfall on to brokers in the form of higher commissions." Guest concludes that "other insurance commissioners should protect consumers -- and hold insurance companies accountable for how they spend our money -- by voting to maintain this requirement in the law in their recommendation to Congress

 

[Dave020]

The cases written this year will adjust to the lower commission rates based on first year premium. The drops in a lot of cases are going to be much higher by percentage than under the old schedule. Instead of dropping for 20% to 10%, they will drop from say 15% to 5% with the 5% based on the premium from 2011, not on any possible increased premium in 2012.

I am not really worried about the current rates so much as losing it all in 2014. An agent can survive at 12/5 or 15/5 on volume. Until we know more about agent comp in the exchanges, that is more worrisome to me. Lots of existing clients will head into the exchanges in 2014.

BTW, I agree that excluding agent comp from MLR does not mean our comp will actually increase.

 

[Yagents]

Most of my contracts were already at 5% renewals, so not much change there. GR went to 4% then eventually 2%, H used to be 5% on increasing premium, these are the two where it will be felt slowly.

More insightful article on the MLR vote. They lie by the way, I had several family members call in support of the vote to DOI and Gov offices.

NAIC Narrowly Passes Resolution Urging HHS to Exempt Agent Commissions from PPACA Standard | LifeHealthPro

 

[Crabcake Johnny]

The question is whether or not the horse is already out of the barn. Even if legislation was passed exempting agents from the MLR calculations, that's not necessarily game, set and match for agents.

I don't see compensation returning to pre-MLR levels. I think health insurance agents have seen an end to 20% advances. That's not to say commissions wouldn't improve. They would but in my opinion we'd see 2 or 3 points added.

Companies like Cigna are working on bigger and better things: Cigna to Sell Health Insurance in India - NYTimes.com

And here's how each state voted: http://blog.aflcio.org/2011/11/23/i...-to-insurers-consumers-face-1-2-billion-bill/

 

[Mark from WI]

This Summer, I helped gather materials for the NAIC to help them see the effects the MLR was having to broker commissions. I also provided them letters from carriers to brokers, from late in 2010, explaining to the brokers that commissions would be cut due to the MLR.
Consumer watchdogs, in an open call, rather than discussing the drop in commissions and the valuable services an agent provides to their constituents, chose instead to question my sources and the authenticity of the letters and the commission schedules I had compiled. In other words, they chose to blow smoke to confuse the issue rather than have the discussion that needed to be had. Of course, any intelligent discussion would have called out the contradiction between saying you are "protecting consumers" while at the same time cutting out those who exist to help consumers.
It was a bizarre experience.
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BTW, I agree that excluding agent comp from MLR does not mean our comp will actually increase.

I'm not sure on this point. If excluding agent comp from MLR does happen, it's up to the carrier where to take commissions. I believe competitive pressures will bring commissions up from their present levels, possibly never to pre-MLR levels, but some.

 

[Guest]

Consumer watchdogs, in an open call, rather than discussing the drop in commissions and the valuable services an agent provides to their constituents, chose instead to question my sources and the authenticity of the letters and the commission schedules I had compiled. In other words, they chose to blow smoke to confuse the issue rather than have the discussion that needed to be had. Of course, any intelligent discussion would have called out the contradiction between saying you are "protecting consumers" while at the same time cutting out those who exist to help consumers.
It was a bizarre experience.

It's a shame they chose to do that. They don't realize they are hurting the consumer they say they are protecting. If they have their way, we will be replaced by low paid cust reps at the insurance companies with no accountability.

Thanks for trying though. We all appreciate it!

 

[VolAgent]

If you really want to get through to the commissioners, you need to put it in terms they can understand.

Talk about the loss in licensing fees, appointment fees, reduced budget and reduced staff. Also, the more companies that pull out, the fewer companies you have to audit. Again, smaller staff, smaller budget.