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MLR Commission Exclusion Bill is in the House

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Reps. Mike Rogers and John Barrow have followed through on a commitment to introduce a bill that could keep producer commissions out of health carriers’ medical loss ratio (MLR) calculations.

Rogers, R-Mich., and Barrow, D-Ga., lined up 14 cosponsors for the bill, H.R. 1206.

If enacted as written, the bill would shield health agents and brokers from the full brunt of a rule in the Patient Protection and Affordable Care Act (PPACA) that require health carriers to spend 85% of large group revenue and 80% of individual and small group revenue on helth care and quality improvement efforts.

Health producers say the current MLR formula is encouraging carriers to cut their commissions by 50% or more.

The commissions should be excluded from MLR calculations, because customers pay the commissions, and carriers collect the commissions as a convenience to consumers, producers argue.

The National Association of Health Underwriters (NAHU), Arlington, Va., welcomed the introduction of H.R. 1206.

“Agent commissions have never been part of an insurance company’s actual revenue,” NAHU says. “Millions of individuals and small businesses depend on licensed agents and brokers to help them navigate the health care marketplace and find health plans that suit their needs and budgets…. Without agents’ expert advice, many individuals and businesses will end up spending more for health insurance policies and receive less care.”

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