The National Association of Insurance Commissioners (NAIC) has created a task force to examine ways of ensuring that the agent continues to be involved in the health market even after the new healthcare exchange concept starts in 2014.
Sandy Praeger, Kansas insurance commissioner and chairman of the NAIC healthcare task force made that disclosure during a meeting of several commissioners with reporters at a conference on healthcare law implementation held by the NAIC Thursday and Friday in Washington.
“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” healthcare decisions,” said Kevin McCarty, Florida insurance commissioner.
The agent issue deals with the fact that under the new law, administrative and other costs must be limited to 15%, and the “medical loss ratio” (MLR) must be 85% of premiums.
The MLR regulations must be in place before Dec. 31, notes Jane Cline, West Virginia insurance commissioner and president of the NAIC. But the NAIC will have to complete work on them long before then, because health insurers will be required to follow them as of next year. The federal Department of Health and Human Services must also approve the regulations
Insurers will be required to fill in a lengthy “blank” now used to file financial reports with state regulators dealing with the issue, and if a non-medical cost is not listed in the blank, it would not be allowed.
The problem for agents is that currently, sale of small group and individual policies earn commissions as high as 20%.
Representatives of the National Association of Health Underwriters, the Independent Agents and Brokers of America, and the National Association of Insurance and Financial Advisers have been working with the state commissioners to ensure that their role in the healthcare industry continues to be assured.
Some people have said that the insurance exchange program, which by law goes into effect in 2014, will reduce the role of agents, McCarty noted.
“I disagree with that,” he said. “Agents serve as a valuable tool” in providing healthcare, “and we are working to protect the integrity of the relationship.”
McCarty noted, however, that the state commissioners will seek to do that, “while maintaining the transparency and integrity of the new law.”
Agents provide comprehensive advice when selling and servicing health insurance policies, he added. He said that comparing “buying an airline ticket with purchasing something as complicated as health insurance is not a fair comparison.”
The commissioners brought up several issues in their meeting with reporters and said they are working hard with state Medicaid directors, state departments of health and other regulators to reach consensus on regulations governing components of the healthcare bill.
Under the law, the state commissioners make recommendations on how to implement certain provisions of the Affordable Healthcare law, which must then be approved or modified by the Department of Health and Human Services.
The priority issues are to create rules dealing with pre-existing conditions in children; raising the age when children can be covered under their parents’ healthcare plans to 26; and lifting the limit on lifetime coverage for certain illness, according to Cline.
HHS must certify these by Sept. 23 under the new law.
“We will see a convergence among the commissioners, their staffs and other parties dealing with the issues they are working on,” said Scott Holeman, NAIC communications director.