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.