Posts Tagged - ‘naic’

Post border

Health Insurance Plan Agents May Suffer Under Reform

Friday, August 27th, 2010
health insurance plan
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.

Post border
Post border

Sen. Rockefeller Accuses Health Insurance Companies of Weakening Reform

Tuesday, May 11th, 2010

Image: West Virginia Blue under CC 3.0

Health insurance reform is already starting to make many changes to how insurers do business. Obviously, they were opposed to the legislation, but since it passed they have been attempting to ensure that it’s enforced in the most favorable way.

Democratic Senator Jay Rockefeller thinks they may be going too far in trying to weaken healthcare reform provisions. He accuses them of hiring lobbyists to water down the spending rules that will force them to spend higher percentages of the health insurance plan premiums collected on providing medical services (as opposed to shareholder dividends or administrative costs). The National Association of Insurance Commissioners (NAIC) and Secretary of Health Insurance Kathleen Sebelius must make their recommendations on the issue by June 1st.

Specifically, he is warning the Obama administration of accounting and statistical tricks that mask the fact that while many insurers already meet the new standards (a medical loss ratio of 85% in large group policies and 80% for individual and small group policies) in many products and areas, they are not yet universally compliant–although they may aggregate their information together in a way that claims to be. In addition, they may be trying–in advance of the 2014 deadline–to classify as many costs as possible as medical expenses.

Post border