The Obama administration yesterday announced a $1 billion plan to create jobs in health care fields. Ok, but here’s a thought: how about preserving jobs that already exist?
As we’ve explained before on the NAIFA Blog, the national health care law’s medical loss ratio (MLR) provision has severely damaged the ability of health insurance brokers to provide important services to their clients and has forced many to lay off employees and, in some cases, retire or leave the business.
A survey we conducted in April found that 75 percent of NAIFA members who sell health insurance had seen their commissions drop since the MLR went into effect January 1. More than five out of ten (53 percent) of the agents reported that their commissions had been lowered by 25 percent or more, which includes 17 percent who said their companies had cut commissions by 50 percent or more.
Studies by other organizations, including the Government Accountability Office and the National Association of Insurance Commissioners, have confirmed that many agents’ commissions are decreasing.
The NAIFA survey found that 13 percent of the agents with reduced commissions had laid off or reduced the hours of their support staff by April, affecting an average of two employees per agency. Another 23 percent were considering staff reductions. More than a quarter (27 percent) said they would be forced to reduce staff if commissions remained depressed.
NAIFA is conducting a follow-up survey to explore how conditions have changed since April. The results will be available soon.
In the meantime, the MLR continues to do damage: driving insurance brokers out of business, eliminating jobs, depriving consumers of valuable customer service, and reducing competition in the health care marketplace.
Additional Resource:
NAIFA White Paper – No Premium on Value: The Health Care Law’s Medical Loss Ratio Brings Dangerous Consequences for Consumers and the Agents Who Serve Them