Regardless of not having performed a single study or impact analysis on the legislation, the American Cancer Society has recently opposed an effort in Congress to exclude insurance sales commissions from the regulations that control the maximum amount that can be spent on administration by insurers.
The reason that the American Cancer Society is standing against the congressional effort is that it claims that it will lead to a rise in insurance premiums. Many argue that there is no proof, numerical, or statistical evidence that would suggest this, but at the same time there is no proof that the premium would even change at all based on agent compensation.
In fact, much of the insurance industry has predicted that including commissions within the administrative costs, which have been limited by new legislation, will cause great harm to the insurance marketplace and will only result in rising premiums and threat of improper coverage.
This is because a significant percentage of insurance brokerages and agencies are made up of small businesses that will not be able to survive within that tight financial regulation. Their demise would – according to insurers – lead to unpredicted harm to the most vulnerable patients in the country; those who are ill and are relying on their insurance, such as those with cancer.
The reason for this is that the jobs of insurance agents and brokers does not consist merely of selling policies. Instead, that is only the opening of a relationship with their clients.
The majority of agents spend over half of their time on tasks that occur after the sale. Almost 90 percent of agents and brokers provide daily assistance with compliance information, while nearly 95 percent help with issues in billing and claims.
The current federal health care law states that insurance companies are not permitted to spend any more than 15 to 20 percent of the revenue they generate from premiums on administration. Supporters of this law believe that this will oblige insurers to spend more of their earnings on medical care.
As a result of this regulation, over 70 percent of brokers have already seen a decline in their income, making it increasingly difficult to spend time on tasks other than sales.