MLR May Sting, but HIEs Could KO Health Insurance Brokers
While it can be debated whether or not agents and brokers are suffering as a direct result of the law or from the cumulative effect of several years of rising healthcare costs, it's clear that MLR rules are reshaping the health insurance industry with many companies abandoning personal insurance lines and reducing the amount they spend on other areas such as fraud prevention and claims management—two areas that insurers had lobbied to be included in the MLR rules.
But a change to MLR rules for agents and brokers isn't a slam dunk. It has some high-powered detractors, including Sen. Jay Rockefeller (D-WV) who insisted in a letter to the National Association of Insurance Commissioners that exempting this group from the rules is essentially a $1 billion windfall that should be funneled to consumers. Rockefeller is strategically lobbying NAIC—whose members include the 50 state commissioners—because individual states are taking up the issue with legislation that would offer protections for brokers and agents.
Regardless of what happens with MLR regulations, it might not deal the final blow for producers. That may come in the form of the health insurance exchanges that could effectively eliminate the need for agents and brokers.
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