STEVE INSKEEP, host:

To the list of people unhappy with the new health care law, you can add insurance brokers. They're worried that the law threatens the commissions they receive from insurance companies. Here's why. Starting next year, insurance firms will have to spend at least 80 percent of the premiums that you pay on direct medical care. That means there will be just 20 percent left for profits and overhead, which includes the brokers' commissions.

Jenny Gold of Kaiser Health News has more.

JENNY GOLD: Rick Michaels was laid off from his job framing art last fall. After 25 years working for somebody else, he decided to go into business for himself.

Mr. RICK MICHAELS (Frame Store Owner): I just thought, well, why not just jump off a bridge there and just try it on my own? I didn't think I had much to lose.

GOLD: Rick and his long-time partner, Phyllis DeMaurizi, opened a new frame store and gallery in Richmond, Virginia. The walls are covered in frames of every sort, and in the back a workshop where Rick cuts his frames and glass.

(Soundbite of banging)

GOLD: Even in a weak economy, the customers are flooding in. When I visited them recently, Rick and Phyllis were in the midst of trying to buy health insurance. At just 54, Rick suffers from degenerative arthritis and he badly needed a hip replacement. Phyllis explained that his insurance from his previous job was about to expire and finding a new plan isn't easy.

Ms. PHYLLIS DEMAURIZI: I'd rather stick needles in my eyes then read, you know, all that you have to read when you're trying to choose insurance. I mean, oh my gosh. It's, you know, you run down the street screaming when you see that.

Ms. DEBBIE STOCKS (Insurance Broker): I love it. I really do. And I've had several people tell me it's boring, but I don't think it is.

GOLD: That's insurance broker Debbie Stocks. It's her job to help individuals and small businesses, like the frame shop, wade through the insurance morass.

Ms. STOCKS: Hey there. How are you?

Ms. DEMAURIZI: How are you?

Ms. STOCKS: Good. Good to see you.

Ms. DEMAURIZI: Good to see you, Debbie.

Ms. STOCKS: How's Rick?

GOLD: Rick limps over as Phyllis explains just how urgent their search is.

Ms. DEMAURIZI: He's bone on bone at this point.

GOLD: On top of Rick's medical needs, one of the shop's employees is uninsured and needs coverage now.

Ms. STOCKS: So here is something that we want to consider, is your hip replacement. If we turn in your forms, your health statement forms, with that on it right now, that's a pending claim, and that's probably going to push the rates up pretty significantly. So one of my thoughts was to start the plan without you.

GOLD: Or, she tells them, they might want to wait to start their plan until Rick has his surgery. In the meantime, they can get an individual policy for their uninsured worker for just a few months.

Ms. STOCKS: It's not like buying a pair of pants. You buy a pair of pants, you try them on, they don't fit, you send them back. You buy an insurance policy, when you try it on, if it's not right, it's too late.

GOLD: But the people who wrote the new health law consistently pointed to administrative costs, including broker fees, as a big reason why health care spending is so high in the U.S. And some health care economists say brokers are middle men whose commissions, at six to eight percent, drive up the cost of care because they get passed on as higher premiums to consumers.

The law may reduce or eliminate the need for brokers with a government-regulated online marketplace for insurance, called an exchange. Debbie Stocks says going online to shop can't replace a broker.

Ms. STOCKS: I don't think the insurance exchange can explain to a person what happens when you go in the hospital, how much will you pay, what happens when you go to the doctor, how much will you pay, what's the most you're going to have to pay this year.

GOLD: Debbie also helps her 200 small business clients with claims and billing issues, something she says an exchange can't do.

Mr. BUZ GROSSBERG (Owner, Buz and Ned's): And there's variations of how we smoke. The big pieces of meat get more smoke and they cook for 12, 14 hours, like pork butts and beef briskets.

GOLD: Buz Grossberg is a husky, effusive man with white hair and a mischievous smile. He owns Buz and Ned's, a popular barbeque joint in Richmond, and he's been Debbie's loyal customer for the past three years. He says it's like having his own HR department.

Mr. GROSSBERG: She not only fields issues we have with the insurance company itself, she knows where to go, who to talk to, and she's very timely and she gets it done. We get answers.

GOLD: What if you had to pay for Debbie's services?

Mr. GROSSBERG: That's an interesting question. I hope, obviously, as a businessman, that that difference would be reflected in the price I'm charged for my policy and that if they had to pay her, all it would be a wash.

GOLD: With that kind of uncertainty, some brokers say they're already preparing for the worst. Debbie knows several who've already sold their businesses in anticipation of the health law's effects. But she's working hard to expand her options.

Ms. STOCKS: Is it what my soul wants? I don't know. 'Cause my soul loves health insurance, and to lose that, I'm not sure what effect that will have on my soul.

GOLD: But just in case, she's buying a property and casualty insurance agency nearby as a backup.

As for the frame shop, Rick had his surgery and they'll be starting their new health plan in January.

For NPR News, I'm Jenny Gold.

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