Doctors aren't the only ones concerned about health-care overhaul. Across the country, insurance agents are worried that the new federal mandates may shut them out of the health-care market.

While large insurance companies debated health-care changes, small independent agents were relegated to the sidelines. And they are watching the health-care overhaul unfurl in Washington with trepidation.

Two changes could dramatically alter the landscape for insurance agents selling health-care policies. First, starting in January 2011, insurers must spend at least 80 percent of the premium on actual health-care costs, not administrative costs — and that could dramatically reduce the commissions given to insurance agents.

Looming on the horizon is another issue. In 2014, when health-care exchanges are supposed to be up and running, consumers will be able to look at Websites and figure out the best plan for themselves — possibly with no help from insurance agents.

"There are two main issues here for insurance agents. One is: How are we going to make out in health-care reform?" said Timothy Jost, a law professor at Washington & Lee University in Virginia and author of Health Care at Risk: A Critique of the Consumer-Driven Movement. "And an even bigger issue is: Where do we fit in the future of the health-care system?"

At LRA Insurance, James Lumbra Jr., the company's vice president, is taking a wait-and-see attitude – waiting to see if Republican gains in the November elections could spell changes in how health-care overhaul is implemented.

Although only 10 percent of his company's revenues come from health-insurance policies, his agency — with offices in Orlando, Melbourne and Tallahassee — has been hesitant to devote more resources or staffers to selling health insurance.

"Health-care reform still poses a dilemma for us," said Lumbra. "Are we going to invest money, time and resources in order to grow that side of the business — just for it to be taken away?"

Lumbra's agency mirrors many across the nation. According to a survey taken in March 2009 by the Independent Insurance Agents & Brokers of America, sales of health insurance comprise about 15 percent of the revenues for independent insurance agencies across the country,

"It's not the bread and butter of our membership, but it is an important stream of revenue," said John Prible, the organization's vice president of federal government affairs. And since Congress began discussing health-care overhaul, "we've devoted a lot of resources with one goal in mind: to make sure that agents still have a role in the sale of the product."

In August, agents and brokers successfully lobbied state insurance commissioners to acknowledge the role they play in the insurance marketplace even after health-care exchanges begin in 2014. And the organization has created a task force to study how to guarantee that insurance agents continue to be a key player.

At a meeting of the National Association of Insurance Commissioners held last month, 25 commissioners sponsored a resolution stating that implementation of health-care overhaul should "recognize and protect the indispensable role that licensed insurance professionals play in serving consumers."

"A number of us feel very strongly about the important role agents play in providing advice and counsel to thousands of Floridians and Americans across the country in making critical health-care decisions," said Florida Insurance Commissioner Kevin McCarty.

For Central Florida insurance agents, the future of health-care policies seems murky. But they feel strongly that many consumers — especially small business owners — will still need their help.

"At the end of the day, the American consumer has to have someone knowledgeable to help them through the process — and heaven help them if they have a claim," said Tom Cotton, who owns Hugh Cotton Insurance Agency in Orlando and serves as the national liaison for the Florida Association of Insurance Agents.

New ratios

Beginning in January, federally mandated medical loss ratios will go into effect that require insurance companies to spend 80 percent of a policy's premiums on providing health insurance — not paying administrative costs.

"Agents' commissions can amount to 15 percent or more of the premium," Jost said, "so obviously, if the insurer has to spend 80 percent on care — and the agent gets 15 percent — that doesn't leave much for the insurance company. So what the agents are afraid of, and it's a legitimate concern, is that the insurers will try to reduce their cut."

More than likely, Jost said, agents in the future will receive a monthly payment or a flat fee, rather than a commission. "But they're probably not going to make as much as some of them have been making,"he said.

What insurance agents would like to see, says Prible, is for the government to gradually phase in the MLR requirements — starting with 75 percent of the premium devoted to health care in 2011 and moving up one or two percentage points each year.

The law allows the federal government the flexibility to phase in the changes, Prible said, "to avoid severe market disruption." And he is betting that the higher MLRs will result in some insurers dropping individual and some small business coverage altogether.

"The administrative cost of administering to individuals is so much greater than large groups, that for a lot of these companies, it's just not realistic to meet the 80 percent threshold," Prible said. "What we're afraid of is the unintended consequence of making a not-so-competitive marketplace even less competitive, with fewer and fewer companies offering coverage."

Enter the exchanges

If you've ever navigated a travel website — and tried to book a flight — you've probably gotten a glimpse of what the future of health insurance may look like.Starting in 2014, consumers — particularly those who are not covered by health-insurance plans at work — will be able to buy insurance through a state health-care exchange, an online marketplace where they will be able to compare policies and plans.

And, just as in the travel business, many insurance agents may make less money — or completely change the way they do business.

But the federal law also creates a new role — that of a "navigator," someone who will help consumers navigate the process of choosing insurance.

For agents, the question is who will become "navigators"? Will navigators be part of a help desk — just answering general questions from consumers? Or will they be licensed, knowledgeable agents who actually help consumers choose insurance? Each state is responsible for setting up its own health-care exchange. the deadline for submitting a plan to the federal government is January 2013. And while some states have begun the process of creating their own exchanges, states such as Florida have opted to let the federal goernment run their health-care exchanges. That may be a mistake = at least for insurance agents working in Florida, say insurance industry lobbyists. "One of the primary messages we're trying to convey to them is this: Wehter you like it or not, whether your state likes it or not, the health-care exchanges are going to be set up," Prible said. And if Florida's politicians don't want to set up an exchange, then Florida insurers and insurance agents won't have any say in how the exhange will operate -- and what role insurance agents will play.

Still, there may be some opportunity for agents, especially in 2014, when all Americans are required to carry health insurance. What they lose in commissions, they could make up in volume, said Prible. "Your insurance office could be a full-service stop," Prible said. "Somebody could come in, get their auto policy, update their homeowners, take a look at the exchange and then the agent could ask, 'Do you need any help enrolling in your health insurance?' "

Linda Shrieves can be reached at lshrieves@orlandosentinel.com or 407-420-5433.