Yes, the most threatening part of the current healthcare legislation is the provision that addresses the MLR. Of course, this provision doesn’t have the biggest social impact, it doesn’t change specific benefits, and it won’t allow for new enrollees…but for those who make a living selling medical insurance, it is a direct blow.
Here’s where many of you will disagree with me –

I think this is one of the healthiest things to ever happen to benefits producers.

For way too long, those who have been sellers of medical insurance have been able to compete with someone else’s product, have gotten paid very well to do so, and have acted in an almost blind fashion to the party writing the paycheck (your client, not the insurance company).

The current compensation structure has allowed mediocrity to have way too high of a financial reward. Really, think about it - if all you are doing is quoting insurance and fixing the occasional problem, you have been grossly overpaid. Those days are now over. In certain markets, you may still be able to make a living through whatever commissions that remain, but that standard of living will change dramatically.

Here’s why this change is healthy

  • It’s healthy for our industry because, if we want to maintain our current levels of compensation, we are going to have to embrace fee compensation with our clients.
  • To justify fees, we will have to be able to create, demonstrate, articulate, and deliver significantly more value than what we have done in the past with our fancy spreadsheets.
  • To add more value, you will have to move beyond being a seller of medical insurance and start bringing solutions that result in your clients maximizing the return they receive for every dollar they invest in their employees.

The opportunity to deliver this kind of value has always been there, but there was no need to go there when spreadsheets paid us so well. Game over. What was yesterday a “nice to offer” approach will be tomorrow’s “have to offer” approach.

It’s a win-win-win

  • You win because you are now competing with something that is within your control.
  • Your clients win because they now have someone who is truly helping make a difference in their organization.
  • You win again because when you generate this kind of value, you will be paid even more than you are today.

Do you agree or disagree with me? What are your thoughts on the implications of the MLR provision?


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Photo by D Sharon Pruitt.