Submitted via IRC for chromas
Insurers Hand Out Cash and Gifts To Sway Brokers Who Sell Employer Health Plans
Human resources directors often rely on independent health insurance brokers to guide them through the thicket of costly and confusing benefit options offered by insurance companies. But what many don't fully realize is how the health insurance industry steers the process through lucrative financial incentives and commissions. Those enticements, critics say, don't reward brokers for finding their clients the most cost-effective options.
Here's how it typically works: Insurers pay brokers a commission for the employers they sign up. That fee is usually a healthy 3 to 6 percent of the total premium. That could be about $50,000 a year on the premiums of a company with 100 people, payable for as long as the plan is in place. That's $50,000 a year for a single client. And as the client pays more in premiums, the broker's commission increases.
Commissions can be even higher, up to 40 or 50 percent of the premium, on supplemental plans that employers can buy to cover employees' dental costs, cancer care or long-term hospitalization.
Those commissions come from the insurers. But the cost is built into the premiums the employer and employees pay for the benefit plan.
Now, layer on top of that the additional bonuses that brokers can earn from some insurers. The offers, some marked "confidential," are easy to find on the websites of insurance companies and broker agencies. But many brokers say the bonuses are not disclosed to employers unless they ask. These bonuses, too, are indirectly included in the overall cost of health plans.
These industry payments can't help but influence which plans brokers highlight for employers, says Eric Campbell, director of research at the University of Colorado Center for Bioethics and Humanities.
"It's a classic conflict of interest," Campbell says.
There's "a large body of virtually irrefutable evidence," Campbell says, that shows drug company payments to doctors influence the way they prescribe. "Denying this effect is like denying that gravity exists." And there's no reason, he says, to think brokers are any different.
(Score: 4, Interesting) by The Mighty Buzzard on Monday February 25 2019, @12:20PM (8 children)
Capital punishment. Problem solved.
My rights don't end where your fear begins.
(Score: 4, Interesting) by Runaway1956 on Monday February 25 2019, @02:52PM (2 children)
My question is, "This surprises WHOM, exactly?" We've already seen this with the opioid market. The more drugs a doctor prescribes, the more richly he is rewarded - here, the more junk an insurance agent can sell, the more richly he is rewarded.
But, that isn't *really* a conflict of interest, is it? I mean, they are just shearing sheep, and it's all about profit!
(Score: 2) by The Mighty Buzzard on Monday February 25 2019, @03:33PM
It's not a conflict of interest for the salesman, it's his job. It is for the doctor though.
My rights don't end where your fear begins.
(Score: 2, Insightful) by Anonymous Coward on Monday February 25 2019, @08:21PM
The thing is that the employer THINKS they they are the one paying the adviser, and thus think they are paying for the advice that would be best for them. Rather they are paying for the advice that is best for the adviser to give.
This is the very definition of a conflict of interest.
(Score: 2) by Fluffeh on Monday February 25 2019, @08:54PM
Lets no jump to a guillotine here that quickly. However, if the brokers did not act in the best interest of their clients, surely that is unethical behaviour at the least, there's probably industry rules in place against that. Take it a step further, and if it goes far enough, then it's fraud, plain and simple. There are laws in place to deal with that.
Insurers are scamming the clients out of money via the brokers who are playing along like their next meal ticket comes from this - at least that's what I'm reading here. Hit them where it hurts. Make it be more cost effective to simply run a good insurance policy rather than a dirty scheme.
(Score: 5, Funny) by c0lo on Monday February 25 2019, @09:25PM (2 children)
Oh, but they do it already, and that's the problem.
I mean, look, the guys who have the capital are punishing you.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by bob_super on Monday February 25 2019, @09:55PM (1 child)
He probably means blow up the Capitol building during SotU, to get rid of the problem.
Typo is understandable.
(Score: 2) by The Mighty Buzzard on Tuesday February 26 2019, @04:25PM
Nah, not that I wouldn't tip my hat to someone who managed it.
My rights don't end where your fear begins.
(Score: 2) by SpockLogic on Monday February 25 2019, @10:10PM
More like "Punished by Capitalism. Problem
solved.Overreacting is one thing, sticking your head up your ass hoping the problem goes away is another - edIII