Carriers Gaming the System

Insurance carriers aren't stupid. They run a business and their model is to make money. At the very least they work the business model to avoid losses when possible. Too bad government doesn't work that way.But I digress.Health insurance carriers withdrawing from the market is nothing new. It has happened before #Obamacare and will continue. But the number of carriers offering health insurance now vs. before 2010 has seen a significant drop off. For the most part the companies no longer playing in the health insurance pool had a small market share. Some only offered coverage in a handful of states while others were in 45+ states but never made an impact.Carriers like World and Celtic are not exactly household names but in some areas they served a market with good products, decent pricing and above average customer service.Moving toward 2014 we not only saw more carriers withdraw but some found ways to minimize the impact of new business by reducing or eliminating agent compensation.Most carriers, Blue is the exception, get 80%+ of their business from the independent agent. Insurance agents are a low cost distribution model. Nothing is paid until business is written and approved. It's a simple system that has worked well for years.At least until the government got involved.The MLR (medical loss ratio) was an arbitrary figure used by the federal government in an attempt to make health insurance affordable. In their small minds, if a smaller piece of the premium d...
Source: InsureBlog - Category: Medical Lawyers and Insurers Source Type: blogs