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Health overhaul hits sales commissions

Wall Street Journal, May 18, 2010

Among the first to feel the effects of the nation's healthcare system overhaul are insurance salespeople, whose commissions for selling policies to individuals and small groups are themselves getting overhauled, the Wall Street Journal reports. The new law requires that insurers use at least 80% of the premiums to pay for medical care for patients rather than administrative costs and profit-taking. But many companies that sell health insurance to individuals and small businesses maintain a lower medical loss ratio because they use more of the premium to cover administrative expenses, including sales commissions.