A new survey by the National Association of Insurance and Financial Advisors shows that the federal health care law’s medical loss ratio (MLR) provision has had a devastating effect on agents’ ability to maintain a high level of customer service to their clients.
...According to the national survey of 861 NAIFA members who sell health insurance, 15 percent said the MLR has decreased their commissions, causing them to lay off or reduce the hours of support staff in their offices (affecting an average of two employees per agency). Additionally, 14 percent of the respondents said they have considered reducing staff and 21 percent said they will do so if commissions remain depressed.
...The MLR provision requires insurers to spend at least 80 percent of individual and small group health insurance premiums and 85 percent of large group policies on medical or quality improvement expenses. Since it went into effect in January 2011, the MLR has prompted most insurance companies to slash the commissions of insurance agents and brokers...
-- 11 percent of respondents say they have gotten out of the market for individual health policies.
-- 5 percent have stopped selling and servicing health coverage altogether.
-- 30 percent say that if commissions remain depressed they will stop selling and servicing individual health policies; 22 percent say they will stop selling all health insurance.
When it comes to premiums, the majority of respondents (90 percent) said their clients’ premiums have increased or will increase in 2012, in spite of the MLR... “Removing agent commissions from the MLR won’t have any impact on premiums, but leaving them in seriously dilutes customer service,” Miller said.
In short, the MLR dictate is poisonous to the market system. It represents a crude form of price control. Any student of history knows how price controls distort markets, from Jimmy Carter's disastrous attempts to constrain oil prices to Hugo Chavez' nightmarish destruction of private companies in Venezuela.
Obamacare is only a slight detour on the road to single-payer, i.e., a completely nationalized health care system. This perversion of the Constitution is antithetical to America's founding, its traditions and its morals. And it would be completely unrecognizable to this nation's founders.
Obamacare must be obliterated, starting in November.