Important News about Insurance Agents and the Public Plan Option

Agents Win Key Health Reform Provision

As reported by National Underwriter, insurance agents have won a critical change in the House Energy and Commerce Committee version of healthcare reform legislation.

Through language negotiated by conservative Democrats as the House prepared to leave July 31, agents won explicit authority to sell within the health insurance exchanges that would be created under the legislation.

The provision in the bill reported out by the E&C Committee would also give agents the authority to sell the so-called public plan in the event that such entities are created under the final version of the legislation, according to officials of the Independent Insurance Agents and Brokers of America.

The key amendment to the E&C bill was added at the request of Rep. Charlie Melancon, D-La., Rep. Baron Hill, D-Ind., and Mike Ross, D-Ark., according to IIABA officials.

Other provisions sought by agents included in the E&C bill would double the small-business exemption from the employer mandate to $500,000 in payroll, from the former $250,000, and would add language explicitly allowing the creation of cooperatives, although the public plan is still in the bill.

They also cautioned that House Democratic leadership has given “no assurances” that the final bill that goes to the House floor in September would contain the provisions. That is because the E&C bill must be reconciled with versions of the legislation reported out by the House Ways and Means Committee and the Education and Labor Committee.

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As I said in an earlier blog the public plan option would be unfair competition to private health plans IF agent commissions and other items like advertising costs were not included in the public plan option's costs. Now it seems possible that the public plan option may provide a fair competitor to private plans. It all depends on what happens in the conference committees which reconcile differences in the various bills that are passed by the House and Senate committees.

Stay tuned and participate in the debate on your health care future...