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DUAL EQUITY BUYS
Cost-cutting is taking a bite from a lowprofile yet well-paid part of the health insurance food chain: brokers.
Kaiser Permanente, the Oakland-based health maintenance organization with more than 330,000 members in Orange County, just changed how it pays brokers selling its health plans. Kaiser now pays a flat fee per member, per month for the business brokers bring.
That's a break from the usual way of paying brokers-giving them a percentage of premiums paid. Brokers who signed up an employee with a yearly premium of $500 were paid $20, assuming they receive a 4% commission.
Under Kaiser's new policy, they'll get $12.82 for that same member.
"Healthcare costs were rising at an unprecedented rate," said Mike Leggett, the Pasadena-based director of large group sales for parent Kaiser Foundation Health Plan. "Kaiser is examining all aspects, (including) the costs associated with maintaining sales channels. We wanted to disconnect compensation with the cost of healthcare. We wanted to tie it to the membership, a constant."
Kaiser said it hasn't done an estimate of how much money it might save through the change.
"That implies that we're out to take money away from brokers," said Leggett, who said that wasn't Kaiser's goal in making the change.
Brokers who actively sell Kaiser plans shouldn't see their pay...