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NAHU 2011: Angoff Seeks Risk Pool Sales

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SAN ANTONIO — The list of major medical insurers courting producers at this year’s National Association of Health Underwriters (NAHU) annual convention included WellPoint, Aetna, UnitedHealth, Humana – and the U.S. Department of Health and Human Services (HHS).

Jay Angoff, a senior advisor to HHS Secretary Kathleen Sebelius and the founding head of what is now the HHS’ Center for Consumer Information and Insurance Oversight, appeared here at a general session to give members of NAHU, Arlington, Va., an update on HHS progress at implementing the Patient Protection and Affordable Care Act of 2010 (PPACA) – and drum up sales of federal Pre-existing Condition Insurance Plan (PCIP) risk pool coverage.

HHS is focusing on setting up the new health insurance exchanges that are supposed to start distributing subsidized health coverage in 2014, and it will do what it can, within the limits of the law, to help health insurance agents and brokers cope with the new PPACA minimum medical loss ratio (MLR) rules, Angoff said.

The rules require health insurers to spend 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts, and producers report insurers are using the MLR rules as a reason to slash commissions.

“We know how controversial [MLR] is,” Angoff said.

When HHS is reviewing state applications for waivers from the MLR rules, one of the factors officials look at is the effects of the rules on agents and brokers, Angoff said.

Angoff spent most of the session talking about PCIP, a program created by PPACA to provide a coverage option for uninsured people with serious health problems between the 2010 and 2014, when PPACA is supposed to create a new system of health insurance subsidies and require insurers to sell coverage on a guaranteed issue, mostly community-rated basis.

The coverage comes with a $2,000 deductible, but it offers comprehensive coverage with no preexisting condition exclusions for rates that are supposed to be comparable to what ordinary individual coverage in a state would cost, Angoff said.

Typical rates are “in the 200s” per month for younger insureds and in the 300s or 400s for older insureds,

Angoff said.

States are running many PCIP programs, but HHS is providing PCIP services that states that are not providing PCIP services themselves.

Sales have been much lower than expected, and HHS recently announced that it will start to work with agents and brokers in starts where it is providing PCIP services.

HHS will pay agents and brokers a $100 enrollment fee per enrollee, Angoff said.

“Nobody’s going to get rich on a $100 per person,” Angoff said.

But the program exists and is funded already, and it could be a good option for people who are eligible for it, whatever an agent or broker’s views about PPACA might be, Angoff said.

“It appears to me that most of you [are] listening,” Angoff said.

Members of the audience laughed and said they were listening.

Angoff also talked about the role of insurance agents. He noted that he had once been an executive at a company that had tried to run a Web-based insurance brokerage operation. The firm found that consumer used the price comparison tools – then bought their coverage from local agents and brokers.

“There’re always going to be insurance agents,” Angoff predicted.

Other NAHU coverage from National Underwriter Life & Health:

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Live Twitter Coverage – June 26-28