A di­vided NAIC ap­proves res­o­lu­tion for med­i­cal-loss ra­tio

Pro­tec­tion for agent, bro­ker fees ap­proved

Modern Healthcare - - MODERN HEALTHCARE - Melanie Evans

“The nar­rowly di­vided vote of in­sur­ance com­mis­sion­ers el­e­vated pol­i­tics over the sound, ev­i­dence­based de­ci­sion­mak­ing that is ex­pected of us as in­sur­ance reg­u­la­tors.”

— Dave Jones, Cal­i­for­nia in­sur­ance com­mis­sioner

As­plit National As­so­ci­a­tion of In­sur­ance Com­mis­sion­ers ap­proved a res­o­lu­tion that calls for Congress and fed­eral health of­fi­cials to make ex­cep­tions un­der med­i­cal­loss ra­tio rules for in­sur­ance agent and bro­ker com­mis­sions.

The res­o­lu­tion passed with five ab­sten­tions and the ap­proval of 26 com­mis­sion­ers. Twenty com­mis­sion­ers re­jected the res­o­lu­tion, in­clud­ing Cal­i­for­nia’s Dave Jones, who said in a state­ment that the “nar­rowly di­vided vote of in­sur­ance com­mis­sion­ers el­e­vated pol­i­tics over the sound, ev­i­dence- based de­ci­sion­mak­ing that is ex­pected of us as in­sur­ance reg­u­la­tors.”

The res­o­lu­tion asks HHS to “take what­ever im­me­di­ate ac­tions” pos­si­ble, in­clud­ing ap­proval of state plans to ad­just the med­i­cal­loss ra­tio rules or des­ig­nat­ing some agent and bro­ker com­pen­sa­tion as health­care qual­ity ex­penses. It also asks HHS to im­me­di­ately sus­pend en­force­ment of agent and bro­ker com­pen­sa­tion-re­lated rules.

The 2010 Pa­tient Pro­tec­tion and Af­ford­able Care Act in­cludes such com­pen­sa­tion among in­sur­ers’ ad­min­is­tra­tive ex­pense. The law’s med­i­cal-

loss ra­tio pro­vi­sion re­quires that small group in­sur­ers spend at least 80% of pre­mi­ums to cover med­i­cal care and qual­ity costs. Large group in­sur­ers must spend at least 85% of pre­mi­ums on med­i­cal and qual­ity ex­penses. Con­sumers re­ceive re­bates un­der the law when in­sur­ers ex­ceed the ra­tios.

Jones chal­lenged HHS’ au­thor­ity to make re­quested changes, as the res­o­lu­tion re­quested, and said re­bates to con­sumers would drop by $1.1 bil­lion un­der the res­o­lu­tions’ pro­pos­als.

The res­o­lu­tion, which states that bro­kers and agents of­fer needed guid­ance but could see com­pen­sa­tion squeezed by the med­i­cal­loss pro­vi­sion, also asks Congress to con­sider leg­isla­tive changes.

Re­sponse to the res­o­lu­tion was as di­vided as the com­mis­sion­ers’ vote.

The mea­sure won the en­dorse­ment of the Amer­ica’s Health In­sur­ance Plans, the in­dus­try’s largest trade group. “The cur­rent MLR reg­u­la­tion threat­ens to dis­rupt the cov­er­age that many in­di­vid­ual and small group cus­tomers have to­day as well as threaten con­sumers’ and small em­ploy­ers’ ac­cess to the guid­ance of a trusted and ex­pe­ri­enced health ben­e­fits ad­viser,” AHIP spokesman Robert Zirkel­bach said in an e-mail.

Con­sumers Union, an ad­vo­cacy group, sharply crit­i­cized the res­o­lu­tion as a threat to the strength of new rules to pro­tect con­sumers.

“The NAIC has worked dili­gently and openly to bal­ance the in­ter­est of all stake­hold­ers in im­ple­ment­ing the Af­ford­able Care Act since the law’s pas­sage,” Lynn Quincy, NAIC consumer rep­re­sen­ta­tive and Se­nior Pol­icy An­a­lyst at Con­sumers Union, said in a state­ment. “To­day’s de­ci­sion is a sig­nif­i­cant de­par­ture from the laud­able process used by the NAIC in most other ar­eas.”

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