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Consumer Watchdog criticizes proposed rewriting of health reform law to favor insurance agents
Wednesday, 09 March 2011 10:30

Consumer Watchdog criticizes proposed rewriting of health reform law to favor insurance agentsThe nonprofit Consumer Watchdog has voiced criticism for lobbyists' push to rewrite the health reform law in such a way as to benefit insurance brokers' salaries. Doing so would substantially increase consumer premiums, according to the organization.

The proposed legislation would allow insurance companies to pay salespeople large commissions on individual and small business policies without counting them as administrative expenses. Spokespeople for Consumer Watchdog said that this would push the financial limits that were laid out in the federal Patient Protection and Affordable Care Act.

"With a new Congress, [brokers] see a chance to guarantee their own paydays at the expense of ever-rising health insurance premiums," said nonprofit director Carmen Balber. "The insurance sales lobby is trying to [ensure] brokers' excessive commissions by law, no matter how much it causes premiums to rise."

Currently, the health reform law requires insurers to spend up to 85 percent of premium dollars on healthcare, in an effort to encourage more efficient operation and a stronger focus on patients' well-being.

Commissions paid to agents have traditionally been considered an overhead cost. If the law were to be rewritten in favor of brokers, Consumer Watchdog said that insurers would be allowed to ignore the original, patient-centered intent.
 

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