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Commissions to agents and brokers fall into the 15 or 20 percent of revenues that insurance companies can use for administrative expenses and profit. Brokers are worried that insurance companies will cut commissions and redirect that money toward their own bottom lines.



The GAO said "almost all" of the insurers it interviewed are cutting commissions. Those cuts enabled the plans to change their premiums.



The report also indicates that one of the most protracted policy debates over the MLR isn't making much of a difference so far.



As the rules for the MLR were being crafted, insurers complained repeatedly about the treatment of initiatives to improve healthcare quality. Those programs are exempt from the calculation of administrative expenses, but plans said the exemption is too narrow. They said the rules shouldn't specify which activities can be counted as quality improvement and that such an approach could discourage investments in new programs.



But insurers told GAO that their loss ratios will barely change because of the deduction for quality improvement. Subtracting those initiatives might shave about 0.5 percent off of total administrative expenses, one company said.





