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Agents’ Helpful Role in Cancer Battles Impeded by Onerous Regulations
By Janet Trautwein
The American Cancer Society recently came out against a congressional effort to exclude sales
commissions from rules limiting what insurers can spend on administration. The Cancer Society
says that this measure will result in higher insurance premiums for consumers. Their opinion is
just that – an opinion. They didn’t hire an expert to analyze the factual impact of the legislation.
They want you to believe them, and then to also oppose the legislation. There is no proof that
premiums will stay flat if sales commissions are left in the administrative figure.
What we do know is this: the result of not fixing the commission problem is that many agencies
and brokerages – which are small businesses – will not survive this drastic change in their
revenue base. And if the Cancer Society has its way, many Americans will lose the ability to
consult with expert health insurance agents and brokers. This sort of outcome would cause
untold harm to America's most vulnerable patients – the ill, and particularly those with cancer.
That is because agents and brokers do much more than just sell insurance.
The federal health care law mandates that insurers spend no more than 15 to 20 percent of their
premium revenue on administration. By including If commissions are included as administrative
costs of the insurer in the calculation of these "medical loss ratios," agents and brokers will see
their business revenue incomes plummet, they will have to lay off more employees, and many
will be forced out of business altogether.
That would be a shameful result for such good community citizens – agents and brokers have a
long history of fighting on behalf of cancer patients. Your agent is who you turn to if your claim
is denied. Whenever you really need help, you call your agent. Consider the case of Tanya
Burns, an agent in Florida. One of Burns's clients was diagnosed with a rare cancerous tumor
over the holidays, while his employer-sponsored health insurance was still in the underwriting
process. Under ordinary conditions, his policy would not have been approved in time for him to
receive the surgery he needed.
But Burns refused to let that happen. She pressed for approval of her client's case in half the
time normally required. She also lobbied the insurer to approve tests not normally covered.
Thanks to her efforts, doctors were able to save her client's life.
A Texas couple turned to agent Edna Kern to help them find a better option than their $900-amonth limited benefit health plan. Kern was able to place them in Texas's Health Risk Pool,
which provided them comprehensive coverage. Her efforts were even more meaningful when the
wife was diagnosed with kidney cancer and successfully received the treatment needed.
Michigan agent James Kenyon assisted one of his clients with research into cutting-edge
treatment options for his newly diagnosed prostate cancer. The treatment the patient chose was
not covered. So Kenyon, the agent, put together a package of statistical evidence and convinced
the insurance company that his client's innovative treatment should be considered the standard -and should be covered. It was.
Examples like these abound. After all, for most agents, a sale isn't the end of their relationship
with a customer -- it's only the beginning.
A survey we recently commissioned found that most agents and brokers spend at least half their
time servicing clients after the initial sale, regardless of the size of the business. Almost 95
percent assist with claims and billing issues – and nearly 90 percent help with compliance
information on a daily basis.
Because more than 70 percent of brokers have witnessed their incomes decline as a result of
health care reform's new rules, they find it harder each day to continue performing these
important tasks for their customers. They find it harder to keep their doors open. These
reductions in income aren't leading to savings for consumers as the American Cancer Society
and other proponents of the health care reform law claimed they would.
But most importantly, they stand up and advocate for their clients. The fight over how insurers'
administrative costs are defined threatens to prevent brokers from fulfilling this crucial and often
life-saving advocate role. If brokers vanish, the health and well-being of vulnerable populations - like cancer patients and their families -- will be at risk. And this is reality, not an opinion.
Janet Trautwein is CEO of the National Association of Health Underwriters.