Producers Role and Pay on the Line with New Health Care Implementation

As we get closer to the date of implementation of the Federal health care mandate, the role of agents and producers is still up in the air. Currently many health insurers are cutting insurance agents commissions to make the medical loss ratios. The IIABA (the national association for independent agents) is lobbying hard to exclude agents commissions in the MLR formula (medical loss ratio). States that implement the Federal plan under insurance exchanges have the power to change this if the Feds don't do it. So far New York is the only State to address the role and pay of agents, as they are included in the proposal but at what commission is still undecided. Other States may or may not follow suit. This is a extremely hard position for health agents. The unknown makes it hard to plan and or invest in their firms because they could be losing their commission income by 2014. My guess is that some States will allow agents commissions and some States will not. Agents are going to have to start charging fees for their service. The challenge to this is to educate the public to agree to pay fees when they never had to before. Stay tuned !  Until next time be careful out there and know your risks. K

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