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Opinion

Obama's health-care law is hurting insurance agents and millions of consumers

This month marks a year since Obama's health law put into play one of its lesser known, but most damaging provisions. A rule that amounts to a pay cut for insurance agencies has complicated the lives of millions, reducing the help with claims that these agents provide.

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If it sounds like it’s a tough time to be an insurance agent, it is. Their median annual income was less than $50,000 before the law went into effect. Many are small business owners who can no longer afford to pay their employees.

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But the problem is much more serious than that. It’s getting tougher to be a consumer in the market for health insurance, too. Unlike agent compensation, premiums have not gone down. And while removing compensation from the MLR would not cause premiums to increase, there have been a slew of unintended consequences from leaving it in.

Agents do much more than sell insurance. They serve their clients, not the insurance companies, helping people when they have trouble getting surgical procedures and tests approved or claims processed. They provide corporate clients with individual enrollment assistance for their employees. They create and administer company wellness programs and often serve as the extended human resources departments for small business clients.

As agents deal with the consequences of the MLR, many are finding that the cost of servicing clients now exceeds their income. They are cutting back on services to customers and laying off support staff. Some are leaving the health insurance business altogether, effectively reducing the competition that the health-care law was supposed to foster. All of this is disrupting the marketplace.

That’s why I applaud the efforts of the National Association of Insurance Commissioners. The commissioners are well respected and have a long history of protecting consumers and ensuring the stability of the insurance market. Their opinion rightfully carries weight among decisionmakers in Washington.

Congress and the president certainly never intended for the law to limit consumers’ health-care choices or reduce the quality of their coverage. As President Obama has acknowledged, “Anything can be improved.” Treating agents’ compensation as a pass-through item and thereby removing it from the MLR equation would be a huge improvement and a first step toward ensuring that Americans continue to have access to the essential support and customer service that professionally trained and licensed agents provide. 

Robert Miller is president of the National Association of Insurance and Financial Advisors, based in Falls Church, Va. NAIFA comprises more than 600 state and local associations representing the interests of 200,000 members and their associates nationwide.

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