Time Magazine: “The First Victims of Health Reform”
Time magazine is out with an article asking whether insurance agents will be the first victim of the health care law – even before it fully takes effect in 2014, agents “might have already experienced a real downside of the massive overhaul, so much so that they may no longer exist.” The article examines the effect that new federal price controls on insurance policies – in the form of medical loss ratio (MLR) requirements forcing plans to pay out a certain percentage of premiums in medical claims – will have on broker commissions, and ultimately their business models.
Also worth noting: The reaction of “consumer advocate” Timothy Jost regarding the impact of the MLR rules on smaller insurers, who do not have some of the economies of scale that larger carriers enjoy. To the idea that some carriers may go out of business because of the onerous new mandates and MLR requirements, Jost responded: “Congress intentionally decided it wasn’t necessary to save every player in the market…Some [carriers] will be lost – good riddance.” Whatever happened to “If you like your current plan, you can keep it” and the President’s campaign promise that “You will not have to change plans?” How will purposefully driving insurance companies out of business – which Jost says was Congress’ intent – allow individuals to keep the coverage they have – and like?