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Healthcare Issues Dominate NAHU Meeting

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At their annual Capitol Conference today, officials of the National Association of Health Underwriters disclosed plans for a new Senate bill that would narrow the proposed exemption of agent commissions from PPACA’s medical loss ratio requirements.

At the same time, House Speaker John Boehner (R-Ohio), disclosed during a campaign talk at the meeting that the House plans to vote next week on legislation repealing the CLASS Act, or the Living Assistance Services and Supports program.

Legislation repealing the bill was reported out last week by the House Energy and Commerce as H.R. 1173, the Fiscal Responsibility and Retirement Security Act of 2011 bill. The bill was introduced by Rep. Charles Boustany (R-La.).

Boehner said in his speech that it was important to get it off the books even though Kathleen Sebelius, secretary of the Department of Health and Human Services said last October that HHS experts had reviewed the CLASS program and could see no way to make the version of the program described in the statutes actuarially sustainable.

The CLASS Act would have created a voluntary long-term care benefits program, and was part of the healthcare reform law passed in 2010, the Patient Protection and Affordable Care Act.

In comments after the E&C panel voted on the bill repealing the provision, Jesse Slome, executive director of the American Association for Long-Term Care Insurance noted, “I don’t understand why some members of Congress are wasting taxpayer money holding this markup when the CLASS Act was already removed and be resurrected.”

“Wouldn’t there time be better spent addressing workable solutions to address the nation’s oncoming long-term financial crisis?” Slome said. ”It’s grandstanding.”

The administration has reassigned all employees and made it very clear to pursue further efforts to implement this provision of the healthcare reform law.

While the bill is virtually certain to pass the House, its fate in the Senate, where the provision originated as a sign of respect for the dying Sen. Edward Kennedy, D-Mass., its champion, is less clear.

As for the MLR bill, NAHU CEO Janet Trautwein said at the NAHU meeting that the bill that will be introduced in the Senate will have Sen. Mary Landrieu, D-La., Sen. Ben Nelson, D-Neb., and Sen. Johnny Isakson, R-Ga., as sponsors.

Another Republican is expected to be added as a sponsor, Trautwein said.

John Greene, NAHU vice president of congressional affairs, said the Senate bill will have several changes from the legislation exempting agent commissions from the MLR as introduced in the House as H.R. 1206.

One removes a provision in the House bill providing exempting commissions on waivers provided through PPACA.

Another limits the carve-out from the PPACA MLR provision to health premiums for individual and small groups, which is the market served by NAHU members, Greene said.

In other words, commissions sold on large groups would not be exempt, he said. “The small group and individual market is where the action is,” Greene said.

Moreover, the revised bill will not exempt bonuses paid by insurance companies to agents from the MLR, Greene said.

Regarding the latter provision, Greene said, “We never intended bonuses to be exempt from normal administrative or marketing costs,” he said.

Greene declined to term the changes as concessions made to gain enough votes to secure passage of the legislation before a hesitant Congress, especially in the critical Senate.

“At the end of the day, the Senate bill accomplishes our objective of preserving [agent/broker] jobs and consumer access to agents and brokers,” Greene said.

In remarks at the NAHU meeting today on the issue, Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at HHS’ Centers for Medicare and Medicaid Services agency, acknowledged, “we don’t see an avenue to modify or delay the MLR regulation; we don’t see a regulatory fix there.”

He acknowledged they undertook the review under pressure from the industry, and that the review was extensive. This included ongoing discussions with NAHU officials and the NAIC, as well as a review by HHS in-house lawyers.

“In the end, the NAIC also reached the same conclusions when they came to us with their recommendations regarding the MLR,” Larsen said.