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from the don't-bite-the-hand-that-feeds dept.
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!
Abortion is the number one killed of children in the United States.
(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
(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
(Score: 5, Insightful) by AthanasiusKircher on Monday February 25 2019, @02:48PM (11 children)
The health insurance industry in the U.S. is a leach that primarily serves three purposes:
(1) To make the most money possible by serving as an unnecessary middleman
(2) 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
(3) 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
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.
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?
(Score: -1, Troll) by Anonymous Coward on Monday February 25 2019, @02:54PM (6 children)
But, but... Obamacare. Affordable healthcare and you can keep your doctor.
(Score: 3, Insightful) by Azuma Hazuki on Monday February 25 2019, @05:21PM (5 children)
1) The individual mandate is Romney's idea, hence this should be called Romneycare.
2) We'd be even worse off without it. I for one would be fucking DEAD.
3) If you have nothing useful to contribute, shut the fuck up and fuck the fuck off, troll.
I am "that girl" your mother warned you about...
(Score: 0, Informative) by Anonymous Coward on Monday February 25 2019, @05:38PM (1 child)
1) Obamacare was a lie
2) Obamacare was a lie
3) Obamacare was a lie
4) I can't even buy a better healthcare plan, it has to go through Obamacare first
5) My Obamacare is fucked up, I'm not getting proper healthcare
6) Obamacare might work for you, it doesn't work for mostly everyone else
7) Fuck off
(Score: 4, Insightful) by Azuma Hazuki on Monday February 25 2019, @06:40PM
If you want a solution, then vote for the US to join the rest of the civilized world with a single payer system. Otherwise shut up and fuck off.
I am "that girl" your mother warned you about...
(Score: 2) by AthanasiusKircher on Monday February 25 2019, @07:37PM
Sorry, but I just cannot possibly blame this on the Republicans or on Romney, even though Romney may have proposed a similar thing in Massachusetts. Every single Republican in both the House and Senate voted against Obamacare.
And let's not forget all the wheeling and dealing it took even to gather enough Democrats to vote in favor of this nonsense -- recall stuff like the "Cornhusker Kickback"??
Then recall how Ted Kennedy, great senior member of the Senate died, and one of the most Democratic states in the country (Massachusetts) chose to honor his legacy by sending Scott Brown in a special election, who basically ran solely on platform to be the single vote against Obamacare -- and even then, the Dems found a way to still make it through Congress. It's hard to think of that many moments in history that were anti-democratic (with a small D) to that level.
Nope, nope -- this mess is solely on the head of Democrats, who have enslaved the American people to insurance companies. (And yes, you think that's hyperbolic? What do you call it when you're forced to work in order to pay a private company money whether you like it or not, or else the government will punish you? No, it's not like chattel slavery, but it is a SERIOUS violation of rights, which our beloved Speaker of the House laughed off when asked whether there was a Constitutional issue.)
Yes, I'd vote for single payer in a heartbeat. Yes, I was as vociferous during the debates back around the time of Obamacare -- telling people how single payer was the only solution and this was BS that was going to result in as much or more profits for an unnecessary middleman industry.
The Dems had everything: the House, the Senate, and the Presidency, and they chose to railroad through this piece of crap. SHAME on them. SHAME on them. SHAME on them.
That remains to be seen. Sometimes a half solution is even worse than doing nothing at all. Yes, it may have helped you in the short-term, but if we spend several more decades enslaved to insurance companies because the Democrats didn't have the courage to pass real reform, I'm not sure that's a win. Because without Obamacare, I agree stuff would get worse faster, which might lead to more of an uproar, which might have led to real reform sooner.
But it's all hypothetical. We have to live with the crap given to us by both parties, both of which are in the pockets of big business, neither of which has the fortitude to institute actual change like single payer... which would, of course, destroy large parts of the insurance industry.
(Score: 3, Funny) by bob_super on Monday February 25 2019, @10:04PM (1 child)
I believe you have this a bit wrong and might come off as excessively negative and personal, which we can't recommend for the sake of proper debate.
How about
"3) Since your overall contribution to the points being discussed could be perceived as detrimental, do you believe that you should experiment the alternative approach of shutting the fuck up and fucking the fuck off, you fucking moronic fucker"
(Score: 2) by Azuma Hazuki on Tuesday February 26 2019, @05:45AM
It'll do, at least until i can figure out how to kick people squah in the nards (that's right, wolfman's got nards) over tcp/ip...
I am "that girl" your mother warned you about...
(Score: 2) by PartTimeZombie on Monday February 25 2019, @11:32PM (1 child)
Jesus, what a stupid way to run a healthcare system.
It's not like there are no better ways to do this, every civilised country in the world already does it better and cheaper than the US, and yet here you guys are arguing about whether Obamacare is better than what you had before, or whatever the hell.
The fact is, what you have sends way too much money to the wrong people, and provides a more expensive, worse service to the end users.
Wake up, who is ripping you off, and why do you continue to let them?
(Score: 0) by Anonymous Coward on Tuesday February 26 2019, @12:20AM
Money money money. We're in the process of taking our elections back but the deck is stacked against us. Gerrymandering, election fraud, citizen's united, and probably some more shit.
We remain divided and the propaganda is very effective at preventing solidarity on issues like universal healthcare, AKA the dreaded SOCIALISM bogeyman.
The cheapest healthcare option available to myself is a shotgun to blow out my brains and leave this shit show behind. That would be a shitty thing to do to my family though, so plowing through the shit storm is the only option; praying that at some point we'll reverse this insane kleptocracy.
(Score: 0) by Anonymous Coward on Tuesday February 26 2019, @03:48AM
The Australian market is trying to be the same.
For years they have raised the prices by 5% while cutting services.
(Score: 1) by khallow on Tuesday February 26 2019, @01:18PM
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".
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!
Look at the rules setting that up.
Because we don't know what would happen if patients had to eat at the moment of the problem huge health care costs?
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
(Score: 2) by opinionated_science on Monday February 25 2019, @03:36PM
when you get caught ;-)
Seriously, anyone actually surprised by this?
(Score: 3, Informative) by fadrian on Monday February 25 2019, @04:20PM
To the insurance folks, their policies are just products like the lousiest ERP system your boss ever decided to buy. And those insurance salesmen use the same sort of sales tactics they would for selling said ERP system, including golf outings, meals, and "small tokens of appreciation, not to mention outright bribes. Why do people think insurance companies, because they're selling the magical "access to health care" are immune from all the scuminess of normal businesses? It must be because the wonderful American health system is immune from corruption.
That is all.
(Score: 2) by iamjacksusername on Tuesday February 26 2019, @01:20PM
A friend of mine was thinking about selling Aflac policies. He went to one of their cattle-call recruitment fairs. His target market was small businesses. They were offering 40% commission on Year 1 policies and 20% the next year for renewals (I do not recall what he said the years after were). The amount of money that changes hands in the insurance business is staggering. Most people are shocked because they just do not understand the amount of dollars involved. 20% commission is pretty standard in many market segments. It varies, obviously.
Insurance is boom-bust: Rates go up, profits are high, then rates go down and losses are enormous. That's the insurance market. From an economics point of view, what 40% commission is saying is two-fold: First, the market is still growing. You throw commissions like that out to gain market share because you think there is going to be a very big pie. Second, when the bust cycle comes, the health care market is going to be shaken up.
Most of the big companies are pursuing vertical integration to even out that cycle. I'm not sure where the future lies in that respect. I think everybody is waiting for thr outcome of the 2020 election on that.