Interesting article in the Wall Street Journal today. As most of you know, a key component of the recently passed health care legislation is that insurance companies must spend at least 80% of the premiums they take in on actual medical care. This ratio is known in the industry as the insurance company’s “medical loss ratio.” For many years the providers easily maintained these numbers anyway, however in recent years most of the large insurers have seen more of the premiums taken in go to profits, administrative costs, and of course commissions.
A discussion such as this one can easily turn political, however the fact remains that insurers will certainly look to slash commissions as one way to comply with these rules.
A link to the article is below. The WSJ site is subscription only but searching google for the article title in quotes will likely find it for you. (“Health Overhaul Hits Sales Commissions”)
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