As an independent insurance agent, mine is an interesting existence. I am contracted with and paid by insurance carriers to act as an outsourced layer of sales and service support to their group insurance clients. However, I am “hired” by employer groups to help them decipher all of their different carrier and plan design choices and cohesively communicate them to their employees.
That’s what makes things interesting. The person/entity who hires me is not the same person/entity who pays me for my services. This is kind of ironic given the state of our entire health care delivery system and the role insurance companies play in it. Insurance companies act as intermediaries between their member clients (insureds) and their provider payors (doctors, hospitals, pharmacies, etc.). Their network of providers is, in large part, what they sell (since some of the risk taken on fully insured products is pooled and re-insured). Without members, they could not attract providers and without providers, they cannot attract and keep members. They are middlemen just like me. But, they control the flow of money for all – employers, providers and agents.
Very recently, one of my carriers announced that they would be cutting the commission rate they pay to people like me for medically rated group clients (those groups that have employees with higher than average ongoing claims exposure) by approximately 60%. Though I get the message – “unprofitable groups are bad” – this approach was not exactly what I was expecting, nor does it seem to have the best long term impact on these employer groups. Effectively, the insurance company has decided to pay less to support a group that provides them with less profits – while groups in this situation are exactly the groups that require the most day-to-day service contact. This is very reminiscent of the ongoing battle between providers and insurance companies regarding negotiated charges.
This is frustrating. However, as the government (a even less stellar efficiency expert) now takes a crack at a fix for the “Health Care System,” throwing new COBRA mandates, FMLA, FLSA, etc. rules, we can be sure that there will be more of this type of thing to digest and disseminate to our clients. I just hope everyone is ready for what that news COULD be!