The Future of Brokers

By Greg Scandlen

Now that the Medical Loss Ratio (MLR) standards are in effect, the role of producers is once again under scrutiny. Writing in Health Plan Week, Steve Davis reports on the recent NAHU conference in Washington, which included a presentation by former Pennsylvania Insurance Commissioner Joel Ario, who now directs HHS’s Office of Insurance Exchanges. Mr. Ario thinks there may be a role for brokers in the insurance exchanges as “navigators,” but:

Ario said the law envisions “baseline similarities” between navigators and insurance agents. However, he said agents sometimes don’t possess necessary “linguistic capacities” and “don’t necessarily serve all of the different populations as well as they could be served.” Those comments were met with boos.

In a follow-up post on the AISHealth Blog, Rick Biehl fleshes out the situation:

Certain features of health reform will invariably be detrimental to health plans, hospitals, provider groups and pharma companies. But for most of these bloated corporations the impact of reform is likely to resemble a pebble dropping into the middle of a lake. For agents and brokers – many of whom have been productive members of local communities for decades, if not generations – reform could mean the end of their livelihood and perhaps their profession. The lack of reason and fairness of this unintended consequence is palpable.

But Mr. Biehl thinks this is all just a horrible mistake:

While clearly not the intent of Congress, “insurance broker/agent” may be the only job title in America that, on a personal level, is facing such dire consequences under reform. Who else in health care business stands to suffer such enormous personal losses?

Sorry, Rick, but you are wrong on this. Getting rid of agents and brokers was EXACTLY the intent of Congress, and all other progressives of the past 100 years. When these people talk about “administrative waste” they mean broker commissions.

“Getting rid of the middleman” has been a core tenet of socialist policies forever. Salesmen especially are seen as leaches on society who add costs but no value, and the socialist economies suffer because of it. The old Soviet Union actually grew plenty of wheat on the farms, and it had plenty of hungry consumers in the cities. What it was missing were the middlemen who could arrange to transform the wheat into bread and transport it from the farm to the city.

Congressional progressives knew that by reducing loss ratios and creating exchanges, they would drive brokers out of business. They figured that consumer questions could best be answered by community organizers with the “necessary linguistic capacities” and experience in reaching out to “communities.” This was seen as a job for ACORN, not some independent businessmen.

All this has been obvious since before Obama got elected. It is shocking that the brokers still haven’t figured it out.

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