Legislation that would exempt agent commissions from the medical loss ratio (MLR) calculation mandated under the health care reform law passed a House committee on September 20.
The bill is H.R. 1206. It is sponsored by Rep. Mike Rogers, R-Mich., and Rep. John Barrow, D-Ga. It was introduced last March.
The bill was passed by voice vote by the House Energy and Commerce Committee (E&C). The vote was 26-14.
However, given that both the House and Senate will recess Friday until after the November election, final action is unlikely before late fall.
And, the legislation is controversial and while it could pass the House, its future in the more evenly-divided Senate is problematic, according to analysts at Washington Analysis.
The bill has strong support within the agent community, with the Independent Insurance Agents and Brokers of America (IIABA), the National Association of Insurance and Financial Advisors (NAIFA) and the National Association of Health Underwriters (NAHU) all voicing strong support.
However, Charles E. Symington, senior vice president for government affairs for the IIABA, acknowledged in a statement that the “the window of opportunity for the bill to become law this year is quickly narrowing.”
He said the IIABA commends the bill’s sponsors, Rogers and Barrow, for their diligent work on this issue and asks Congress to build on ‘’recent momentum to pass this crucial fix.”
Moreover, Democrats on the committee are even challenging arguments advanced by supporters on the committee that the impact on insurance agents from the MLR is “devastating,” and is impacting jobs.
The provision in the Patient Protection and Affordable Care Act (PPACA) limits administrative costs on health care premiums to 15 percent on large groups and 20 percent on small group and individual market premiums.
The legislation only impacts agents serving the small group and individual markets.
The bill also requires Health and Human Services (HHS) to defer to state insurance commissioners regarding requests for MLR waivers.
In asking the committee to report out the legislation today, Rep. Fred Upton, R-Mich., chairman of the committee, said that PPACA’s MLR requirement gives the HHS sweeping power over the design of health insurance at the expense of consumer choice.”