PPACA: NAIC Panel Backs MLR Measure

The NAHU data showed that, “to the extent that reductions in commissions have occurred, in general it appears the main impact has been on very high first-year commissions in some states; commissions have by and large been reduced in high-commission states to levels typically found in lower-commission states, and high-paying insurers have cut commissions to levels paid by their competitors,” the coalition says. “Widespread reductions across the country and all plans were not apparent.”

The coalition says information about California compensation levels included in a supplemental data section “demonstrates that producer commissions have increased very dramatically in recent years and suggests that recent changes in compensation may in fact represent a market correction rather than an unreasonable reduction in income.”

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McCarty has put out a statement welcoming the advance of the H.R. 1206 endorsement measure.

In the 6 months since the MLR requirements have become effective, 13 states have filed MLR waiver requests with HHS because of concerns about the effects of the requirements on the individual health insurance market, McCarty says.

“We are also monitoring a national trend of changes in agent compensation by insurance companies to meet these requirements,” McCarty says. “This has created a serious concern that lower agent commissions could encourage agents to leave the marketplace precisely when they are needed most.”

Consumers need agents’ help to find the best products for their families, McCarty says.

NAHU Chief Executive Janet Trautwein and Terry Headley, president of the National Association of Insurance and Financial Advisors (NAIFA), Falls Church, Va., have welcomed the decision of the NAIC task force to support the bill.

Trautwein has issued a statement asking the NAIC executive committee to move promptly to endorse the bill and urging HHS officials to delay enforcement of the MLR regulations.

Headley says the NAIC task force move shows that the task force understands how the MLR rule is hurting small businesses and insurance customers.

“If someone has difficulty understanding their coverage or deciding what coverage is right for them or if they have trouble filing a claim, they can turn to their broker for help,” Headley says. “The MLR rule, as it exists today, marginalizes the role of professional insurance advisors.”

Ethan Rome, executive director of Health Care for America Now, Washington, says the NAIC advisors task force has “acted like a wholly owned subsidiary of the health insurance industry.”

“They did exactly what the industry wanted by voting to gut one of most significant provisions of the Affordable Care Act that holds the insurance companies accountable,” Rome says in a statement.

PPACA “is about protecting small businesses and consumers who have been beaten up and overcharged for decades, but today the NAIC got it backwards,” Rome says. “It’s repugnant that they would steal $1.3 billion from consumers and small businesses and hand it over to the insurance companies.”

Other MLR coverage from National Underwriter Life & Health:

• Analyst: MLR Rules Are Lowering Some Health Rates
• Aetna Unit Files for 10% Health Rate Decrease
• NAIFA Finds Deep Health Commission Cuts
• MLR Commission Exclusion Bill is in the House
• Ario to NAHU: Agents Likely to be Part of Exchange System