Congress is like the late comedian Rodney Dangerfield. Sometimes it passes laws, only to have them interpreted into something different by the federal bureaucracy charged with implementing them. Considering this, it would be understandable if lawmakers were to complain that they "don’t get no respect." A few examples:
- Congress places language in the healthcare law stating that independent agents and brokers are to be included under the newly reformed system. But the Dept. of Health and Human Services (HHS) takes steps to ensure agents won’t be fairly compensated.
- Congress has not contemplated imposing price controls on the private sector. But the Federal Crop Insurance Corp. (FCIC) is now dictating how much private sector insurance companies can compensate their insurance agents.
- Congress wisely decided in 1981 that direct government sales of crop insurance are inefficient and producing losses, so it turned to private sector insurance agents to deliver crop insurance. The losses turned to gains and the program is making billions for the Treasury. Now, a union of federal employees is lobbying to turn the clock back 31 years and throw private sector agents under the bus, so the union members can immunize themselves from potential cutbacks.
It must come as a big surprise to members of Congress that the federal government is imposing price controls in the private sector. The last time this happened was when President Richard Nixon did it in 1971. It was quickly abandoned because it was a disaster. So why is the FCIC doing it now?
After studying the issue for a year, the National Assn. of Insurance Commissioners (NAIC) finally endorsed a legislative resolution that would preserve consumer access to agents and brokers. NAIC also urged HHS to take immediate action to mitigate the adverse effects the MLR rule is having on the ability of insurance producers to serve the demands and needs of consumers. HHS summarily dismissed the NAIC’s recommendations.
Resistance to agents and brokers remaining involved—and properly paid—under the health insurance reforms enacted in 2010 is coming primarily from HHS. But efforts to counter the HHS rule are gathering steam across the nation.