The pricier the policy, the more money insurance brokers can make, study shows
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Insurance plans that pay higher commissions to brokers usually have higher premiums, which is contributing to rising healthcare costs, according to a new study.
Researchers from Johns Hopkins University said Wednesday that brokerages operating under fee-based models, as well as those that have no middleman purchasers, offer the most value for businesses of all sizes.
Under the current system, smaller plans often have higher commission-to-premium ratios than larger health plans, researchers said. They found a $1,000 increase in premiums correlated with an approximately $30 commission hike for the insurance broker. Dr. Marty Makary, who led the study, said the study s results quantify the conflict of interest facing many brokers across the U.S., since agents can be paid a bonus by insurers for selling a more pricey policy, even if it s not in the employer s best interest.
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The dust has settled and the 2020 election has concluded with former Vice President Biden poised to become president. At the same time, Democratic control of the House of Representatives has narrowed to the smallest margin in twenty years and one of the lowest margins for a first term president. Control of the Senate is still up in the air with runoffs on January 5, 2021 in the two Georgia Senate races.
In this memorandum, we look at the health care agenda of President-elect Joe Biden and the Democratic Party. Initially, a Biden Administration will focus most of its efforts on a robust response to the COVID-19 pandemic. It will also focus on taking administrative action to reverse some of the health policies implemented during the Trump Administration such as the Association Health Plan regulation, short-term, limited-duration regulations and regulations under section 1557 of the Affordable Care Act (“ACA”).