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Insurers Hand Out Cash and Gifts To Sway Brokers Who Sell Employer Health Plans

posted by Fnord666 on Monday February 25 2019, @11:42AM   
from the don't-bite-the-hand-that-feeds dept.

upstart writes:

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.

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Original Submission

• Re:Is this supposed to be surprising? (Score: 1) by khallow on Tuesday February 26 2019, @01:18PM

  by khallow (3766) on Tuesday February 26 2019, @01:18PM (#806893) Journal

  To make the most money possible by serving as an unnecessary middleman

  Someone has to serve that role. A large portion of the population doesn't save money and hence, can't self-insure. Even single payer has government as the "unnecessary middleman".

  To obfuscate cost structures for health care, making it next to impossible to determine how much services or products actually cost, thereby allowing (i.e., colluding with) pharmaceutical companies, medical equipment providers, and health care providers to jack up prices significantly without consumers realizing it

  I don't blame insurance. The whole system is rigged that way. And of course, it's not in the insurers' interests to "jack up prices". That jacks up their costs rather than their profits!

  To overcomplicate any attempt by patients and providers to make and receive payments for services, necessitating a large amount of overhead and wasted time as providers and patients debate what is justified, reimbursable, and what qualifies under the complicated contracts insurance companies write

  Look at the rules setting that up.

  Oh, I guess they're also supposed to serve as an "insurance" pool, whereby patients are able to pay for services that are more expensive than they'd be able to budget for, but it's hard to know how effective insurance companies actually are at that. They're certainly incredibly inefficient from a monetary and a time standpoint.

  Because we don't know what would happen if patients had to eat at the moment of the problem huge health care costs?

  Anyhow, to serve their primary purposes listed above, obviously they give rewards to brokers who bring in more business. They're trying to make the most money possible. Why wouldn't they introduce even more inefficiency in the system by paying middlemen to convince employers to use even more middlemen? There's so much random money being thrown around in the middle for a system that's completely unnecessary, so why not give some more out?

  Well, how important is human health? Sounds like a lot of people think it's pretty important to the point of throwing a lot of money at it. That's where the random money is coming from. Last I heard

  Parent