With time running out for action on key regulations, insurance agents are waging an intense battle on several fronts in their efforts to remain relevant in a health market being reshaped through implementation of the Patient Protection and Affordable Healthcare Act. While major reform through creation of health insurance exchanges will not take effect until Jan. 2014, other regulations must be in place by year-end.
Medical Loss Ratios
For insurance agents, a key challenge is the so-called medical loss ratio standard, which requires healthcare plans to spend as much as $0.85 of every premium dollar on healthcare delivery.
Insurance agents, who are being supported by state regulators, want an exemption from these regulations, especially since the small group and individual market they serve currently pay commissions as high as 20 percent.
Health insurers must start compliance with the MLR by Jan. 1 through a “blank” being developed by state regulators and approved by the Department of Health and Human Services. The target date for completing work on the blank is Oct. 1.
Kevin McCarty, Florida insurance commissioner and a member of the NAIC task force crafting the regulations that will be used to implement the new law, is insisting that a continued role be developed for agents.
“Agents serve as a valuable tool in providing healthcare, and we are working to protect the integrity of the relationship,” he said at a recent meeting in Washington.
Mr. McCarty noted, however, that the state commissioners will seek to do that “while maintaining the transparency and integrity of the new law.”
He added that agents provide comprehensive advice when selling and servicing health insurance policies. He said that comparing “buying an airline ticket with purchasing something as complicated as health insurance is not a fair comparison.”