Aetna is hoping its approach to insurance agent and broker commissions in response to changes under the federal health reform law will prove successful.

Mark Bertolini

Mark Bertolini, the national health insurer’s CEO and president, called its stance on commissions “post-reform positioning” during a recent conference call to discuss its 2010 earnings.

“While brokers have been, and will remain, key partners with Aetna, we have been consistent in our conclusion that the minimum MLR [medical loss ratio] requirements in the health care reform law would and have catalyzed changes in broker compensation arrangements,” Bertolini said.

The company recently issued a statement saying it was “taking a number of steps” to meet the requirements of the health reform law affecting medical loss ratios. Insurers must spend 80% of individual and small-group premiums taken in and 85% of large-group premiums collected on medical costs.

Despite a push by insurance trade groups, so far agent commissions appear destined for the administrative ledger, leading to reductions of up to 50% by some insurers.

Aetna is shifting to “a direct service fee broker compensation strategy” for business with more than 50 employees, most of whom already negotiate compensation directly with their brokers, according to the insurer.

The company said it already sees brokers and customers negotiating different amounts than what brokers earned in the past.

Bertolini described the company’s “framework for creating transparency in our commission structure,” in his comments on earnings.

“First, where possible, to ensure transparency to allow larger customers to continue to negotiate fees directly with their broker or consultant; second, to restructure commissions so they are decoupled from annual health care inflation, improving affordability and driving future operating efficiencies; and third, to reduce the level of commissions to improve the affordability of our offerings,” Bertolini said. “We have made a series of changes for 2011 and believe we can execute these changes while maintaining a stable membership base and risk profile.”

The insurer ended last year with 18.5 million medical members, a decline of 446,000 from 2009.

Company officials said the losses reflect a reduction of 611,000 commercial members, mostly fully insured and almost half of which were a result of economic attrition. The company said it added 153,000 Medicaid members, about 40,000 of which were from new contracts in Pennsylvania and Florida.