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NAIC: MLR Action Deferred

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NATIONAL HARBOR, Md.— The National Association of Insurance Commissioners has delayed until Nov. 22 a vote on a contentious resolution that would have asked the Department of Health and Human Services to unilaterally use its authority to exempt agent health commissions from the medical loss ratio, rather than waiting for Congress to act.

In her last comment before closing the NAIC’s fall meeting here Sunday, president Susan Voss said the issue would be discussed again on a Nov. 22 plenary conference call that involves all commissioners.

“We’ll have plenty of time between now and that member call to have discussions and exchange ideas,” she said.

“In the meantime, the NAIC staff will explore if we should present a process for presenting future resolutions so members have time to talk about them,” Voss said.

According to Consumer Watchdog, Voss acted under pressure from four commissioners, Dave Jones, California; Mike Kreidler, Washington; Thomas Leonardi, Connecticut; and Teresa Miller, Oregon, to delay the vote.

The commissioners objected because they believe the NAIC was asking HHS to do something that exceeded its authority.

At a roundtable involving other commissioners that was held as part of the NAIC meeting, California Insurance Commissioner Dave Jones said, “I was very surprised to learn in a casual conversation by happenstance that our solution was going to be proposed to the full NAIC to urge Congress and HHS to make changes to the medical loss ratio rule.”

He added that, “There had been a task force and then a committee and a NAIC plenary phone call at which I asked specifically the question to [McCarty] whether the NAIC was taking a position on this, and the answer was ‘no.’ So that’s why I was really surprised to see this emerge suddenly without any formal notice or notification.”

The resolution is being pushed by health insurance agents because legislation that would exempt agent commissions from the MLR is tied up in Congress. The resolution provided by NAIC commissioners says:

“The Professional Health Insurance Advisors Task Force has voted to endorse H.R. 1206, the bipartisan Access to Professional Health Insurance Advisors Act of 2011 but recognizes that the current political environment makes the prospects of enactment for this and other potential Patient Protection and Affordable Care Act, amendments uncertain at this time.”

The resolution states that, “It is essential to consumers that producers continue to perform these duties, as employers and individual consumers will continue to need professional guidance in the years to come.”

But, a report prepared by the task force says that “The states with higher MLR requirements have not observed any problems with consumer access to insurance or to producers.”

At the same time, another report indicates that health insurers are cutting back on some broker compensation schemes. One North Carolina insurer, Wellpath, reported that the MLR caused it to reduce first-year commissions for individual policies from 27% to 14%.

The vote was pushed by Kevin McCarty, Florida insurance commissioner, and incoming NAIC president. Sources said that McCarty is believed to be under pressure from Rick Scott, the state’s governor and a rabid opponent of the PPACA.

Scott is the former president of HCA. He left HCA after the company paid a multi-billion dollar fine to settle Medicare fraud charges.

The sources cited two recent events, a Florida Office of Insurance announcement that two companies have dropped out of the Florida insurance market because of the MLR, and because the draft resolution was circulated to all commissioners by Mary Beth Senkewicz, deputy Florida insurance commissioner at the time.

“Florida Insurance Commissioner Kevin McCarty tried to pull a fast one over the weekend, but thankfully responsible regulators from other states called him out on it,” said Ethan Rome, executive director of Health Care for America Now. ”McCarty is acting more like a right-wing ideologue than a responsible regulator. He shouldn’t be using his position in Florida and at the National Association of Insurance Commissioners to advance a right-wing political agenda to weaken the Affordable Care Act. Florida should give up its efforts to undermine the health law and to turn back the clock to benefit the health insurance industry.” 

Senkewicz was forced out two weeks ago after criticizing former governor Jeb Bush at a public dinner, citing inaccuracies in Bush’s comments regarding health insurance issues, according to what numerous sources have told National Underwriter.

Other sources note that the two insurers who dropped out constitute three-tenths of one percent of the Florida insurance market.


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