NAIFA Survey and MLR Dangers

A recent survey was conducted by the National Association of Insurance and Financial Advisors (NAIFA) of 861 of its members who sell health insurance. Seventy percent of the participants who sell health insurance have seen a decrease in commissions.

The medical loss ratio (MLR) provision of the health care reform law is reaping negative effects when it comes to the health care industry and its workers. Agents’ commissions are decreasing, and many insurance agents are leaving the field as a result. And it doesn’t seem to be coming to a halt any time soon.

While there have been many up sides to the health reform bill, the MLR provision in the Patient Protection and Affordable Care Act requires insurers to spend at least 80% of individual and small group health insurance premiums and 85% of large group premiums on medical or quality improvement expenses.

As with most laws passed, there will be an opposing side, someone who will not benefit from the changes made. In this case, can there be a happy medium where public access to health care can coexist with medical insurance companies? Clearly those getting laid off or feeling compelled to vacate their jobs are not happy.

This is a largely a contribution from policy holders who rarely use their insurance coverage. Additionally, an imbalance is caused by health insurance companies who themselves are gaining huge amounts of capital.

The job market is gradually improving, but still not very friendly. The MLR provision seems to have created a bit of a loophole for those interested in keeping their careers as insurance sales agents.

For the time being, health insurance agents will have to cross their fingers, glue themselves to their cubicles, or consider a new career in construction or retail.




About B. Somers

B. Somers is a contributor to Health Insurance News, focusing on medical coverage, carriers, health reform and the conflicts surrounding insurance. Writing for the company's sites has provided a strong introduction to health insurance, and the opportunity to gain knowledge in the insurance industry.