The honeymoon between insurers and the crafters of the Patient Protection and Affordable Care Act (PPACA) is clearly over. In fact, the marriage may already be on the rocks.
As reported by USA Today, insurance companies that offer coverage through the PPACA are penalizing agents that sell the plans insurers are losing big bucks on. Regulators are striking back by calling for even more restrictions on the already limited flexibility insurers have in plan design and offerings.
But while some insurance companies openly admit to reducing agent commissions on sales of the plans that more sick people are purchasing, other companies claim commission cutting is simply a bit of corporate belt tightening.
Recommended For You
Humana spokesman Mark Mathis framed Humana's reason for adopting the virtually ubiquitous commission reduction strategy as the company's way "to maintain sustainable and affordable health plans for our members."
Regardless of the explanations being offered, consumer advocates and government health care officials are responding angrily to the strategy.
"Many states are looking at doing whatever they can do to support to agents in their states and not allow health plans to game their commissions so they enroll only healthy people," Peter Lee, executive director of the Covered California exchange, told USA Today. "It flies in the face of the ACA … to say in code to agents, 'Don't bring us sick people,' or to make it harder for some to enroll."
State lawmakers across the nation are examining the issue, looking for ways to protect agents' commissions, to make sure consumers have access to the plans they need, and to still allow insurers to make what they need to stay in the game. Insurers are fighting back, arguing they need to be able to at least control the losses they are suffering on PPACA plans by taking actions like commission reductions.
While federal health care reform officials declined to comment to USA Today, the dust kicked up by the commission reduction ploy clearly won't settle any time soon.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
