Insurers association calls for removal of broker commission restrictions from AHCA

Insurance agents speak out against restrictions that have resulted in as much as 50% cuts in their commissions

Insurers association calls for removal of broker commission restrictions from AHCA

Life & Health

By Allie Sanchez

The American Health Care Act made no mention of the removal of broker commissions from the medical loss ratio (MLR) provision, which is currently in place under the Obamacare health plan – and insurance agents aren’t happy. 

MLR stipulates that insurers have to spend as much as 85% of the premiums they collect on medical claims, which has resulted in the reduction of commissions by as much as 50% since the exchanges opened in 2010. 

Now, the National Association of Insurance and Financial Advisors (NAIFA) claims, in a report by publication ebn, that 80% of its members have seen a dip in commissions since the Affordable Care Act (ACA) took effect.  

NAIFA senior vice president of government relations Diane Boyle said in the report that the body is asking the government to remove restrictions on commissions “from both sides of the equation, as it does not belong in there at all.” 

“The MLR serves as a perverse disincentive for plans to reduce health insurance costs. The higher the premium, the easier it is to make the MLR fit,” said Joel Wood, Council of Insurance Agents and Brokers senior vice president for government affairs. “It’s a government price control, and those are always (an) anathema to our membership.”  

Boyle added that the agent/broker community is “certainly going to re-engage and see if (they) can have (the removal of commission restrictions) brought up as a priority issue” with legislators. 

“It is a concern. The concerns that we had before don’t go away,” she concluded. 


Related stories: 
Health insurance reform: Trump supporters to lose out
24 million will lose insurance under AHCA-CBO
 

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