As we know the MLR, aka medical loss ratios were supposed to ensure consumers received good care and service. We all just saw all the record breaking profits of 
the major health insurers for the first quarter of 2011 and how did they do it? As consumers we see many different areas but they are cutting or starving the hands that feed them that is if the insurers want more policies sold via insurance agents.
You can read through the highlights below as many have or are already considering laying off employees and commissions have been cut. There seems to be a direct correlation between when the MLR went into effect on January 1st and commissions according to the surveyed information below. As consumers when agents lay off staff, we stand to see less in customer service for sure as that’s the way that wheel rolls, so there’s less support in helping customers file claims and offer wellness services as some agents do today. Some agents will begin charging fees for services they used to offer for free but some states do not allow agents to do so so they are kind of stuck there.
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As the number of insurance agents drops, so does the ability sometimes to keep enough competitive carriers out there. I guess this is the next endangered group of employees and businesses to be hit, and when you come to think of it, they are the people that drive revenue for them, so it sounds like the small insurance agent will also in a matter of time be giving way to the web. As a consumer it’s one more lost benefit with customer service. I didn’t see any carriers having issues with medical loss ratios nor profits so what gives here? BD
A new survey of members of the National Association of Insurance and Financial Advisors shows that the medical loss ratio (MLR) provision of the Patient Protection and Affordable Care Act (PPACA) is causing devastating consequences for health insurance agents and the individuals and small businesses they serve. While Congress enacted the MLR with the aim of ensuring consumers get good value for their premiums, the NAIFA survey shows that in many cases the provision is having the opposite effect.
According to the poll of 520 NAIFA member agents and brokers who sell and service health insurance policies, 75 percent have seen their commissions decrease since the MLR went into effect Jan. 1, 2011. An additional 13 percent have been informed by insurance companies that commissions will be cut in the near future.
The decreases have been substantial. More than five out of ten (53 percent) of all the agents surveyed report that their commissions have been lowered by 25 percent or more, which includes 17 percent who say their companies have cut commissions by 50 percent or more.
Most of the agents who have thus far absorbed the hit of the reduced commissions say they won't be able to do so forever. Nearly half (44 percent) say that if allowed they will charge fees for services they have always performed at no additional cost to clients. However, many states prohibit insurance agents who receive commissions from charging fees. Customer services will be on the chopping block for 30 percent of the agents, if commissions remain depressed. Almost three out of ten (29 percent) will stop serving individual health insurance clients, and 18 percent will stop selling health insurance altogether.
The survey shows that 13 percent of the agents with reduced commissions have laid off or reduced the hours of their support staff, affecting an average of two employees per agency. Another 23 percent have considered staff reductions. More than a quarter (27 percent) said they will be forced to reduce staff in the future if commissions remain depressed.
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