NAIFA President Terry K. Headley explains in a new National Underwriter “Feedback” piece how the medical loss ratio (MLR) provision of last year’s health care law has shrunk brokers’ commissions and made it impossible for many of them to continue vital customer service functions. Terry cites a NAIFA survey that found 75% of brokers have seen commission go down since the MLR went into effect and more than half have seen reductions of 25% or more. Some advisors have had to lay off support staff, curtail the time they spend assisting clients with claims, and in some case even get out of the health insurance business.
Meanwhile, a survey by McKinsey & Company found that because of health care reform “More than 30 percent of employers overall, and 28 percent of large ones, say they will definitely or probably drop [employee health insurance] coverage after 2014.” More than half of companies that say they have a “high awareness” of the health care reform law say they will drop coverage. These figure far surpass estimates by the administration and Congressional Budget Office.