Image: Jennifer Feuchter under CC 3.0
Although healthcare reform tries to help many, it will end up hurting at least some. For example, the business model of many health insurance brokerages and agencies is in danger.
Provisions involving medical loss ratios, which include agent commissions in the “administrative” category that will be regulated and limited, will have a negative effect. In addition, brokerages may be made redundant by the state insurance exchanges and accompanying websites that must be launched by 2014. On the bright side for them, the National Association of Insurance Commissioners passed a resolution that affirmed the importance of licensed insurance professionals.
With the possibility of a double-dip recession looming, more job losses is obviously a downside. However, industry experts predict that these companies have several options for adaptation. Hopefully, their experience in navigating the complexity of the market and helping people decide on a health insurance plan will still be in demand. Their compensation model may also be adjusted in favor of flat fees instead of commissions.