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WASHINGTON—The looming presidential election could have an impact on whether insurance producers will be able to get their commissions excluded from minimum medical loss ratio calculations under the Patient Protection and Affordable Care Act.
Under the health care reform law, health insurers must spend at least 85 cents of every premium dollar collected on health care in the large-group market and 80 cents in the individual and small-group markets.
Agent and broker groups have tried to have their commissions excluded from the requirement, and the National Assn. of Insurance Commissioners late last year bolstered its case with a recommendation that the commissions be carved out.
But in November, the U.S. Department of Health and Human Services issued a final rule that did not carve commissions out of the MLR calculation. That led producers to redouble their efforts on Capitol Hill, where Rep. Mike Rogers, R-Mich., already had introduced the Access to Professional Health Insurance Advisors Act—H.R. 1206—in the U.S. House of Representatives last March. The bipartisan bill has nearly 180 co-sponsors.
But the Senate did not move until this month, when Sen. Mary Landrieu, D-La., introduced S. 2068, which bears the same title as the House measure. Three other senators—one Democrat and two Republicans—have signed on as co-sponsors.
One of those Senate co-sponsors said the value-added services of agents never were intended to be negatively affected by health care reform.
“Agents will always have an important role to play” in helping people understand their coverage options, Sen. Ben Nelson, D-Neb., said during a legislative conference held by the Washington-based Council of Insurance Agents & Brokers this month.
He urged the audience to put pressure on HHS to understand the role of the agent.
Supporters of the MLR carve-out, which includes major broker and agent groups representing producers who sell commercial property/casualty and employee benefit products, welcomed the introduction of the Senate bill, but they pointed out that getting both chambers to approve legislation in a presidential election year will be an uphill battle.
“I still think it's very difficult in a presidential election year to get anything to the finish line,” said Joel Wood, senior vp at the council. “Its enactment is a big priority,” he said. “Opening up any aspect of the health reform law is challenging in this environment.”
“We don't worry about whether employers need brokers; they need them more than ever before to navigate these turbulent times and manage costs as best possible,” Mr. Wood said. “So for us, this isn't an issue so much about protecting agent jobs.”
He said the council has several objections to the MLR.
“First, it is a governmental cost control, the antithesis of what we stand for,” he said. “Second, it inhibits innovation and may undercut cost-saving efforts by brokers and health plans by branding those expenditures as administrative overhead. And third, it is a perverse disincentive for plans to put downward pressure on premiums. After all, the bigger the premium, the easier it is to make the 80% or 85% ratio. This goes to the core of our problems with the PPACA. What we need is health care reform. What we got is health insurance reform.”
Moving a bill forward in a presidential election is “certainly not an easy lift,” said Charles Symington, senior vp of the Alexandria, Va.-based Independent Insurance Agents & Brokers of America. “However, we have renewed momentum with the introduction of the Senate bill and we have strong bipartisan support.”
Noting that the IIABA will have more than 1,000 members in Washington for its April legislative conference, a key objective is seeking more Senate co-sponsors of the bill, he said.
Mr. Wood said one reason the House hasn't moved is that House leaders wanted bipartisan legislation introduced in the Senate. “Now that that's happened, we will push to have the House bill considered,” he said.
Mr. Wood added that council is following “the efforts by major health plans to move toward a fee system rather than commissions. In some jurisdictions, you can't take a fee for placement services.”
“We've had significant success on the House side getting support; we want to do that in the Senate,” Mr. Symington said.
“The more sponsorship we can get on both bills, hopefully the more heat we can put on the administration on this topic,” Mr. Symington said.