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Life Health > Health Insurance

Agent to colleagues: Get the MLR bill moving

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Guy Furay, a South Carolina health insurance broker, is trying to sell other agents, brokers and benefits consultants on doing more to support S. 1661, a bill that could get producer compensation of health insurer medical loss ratio (MLR) calculations.

Furay, a member of the National Association of Health Underwriters (NAHU), is sending every U.S. senator a letter in support of S. 1661, and he’s hoping other health insurance producers will do the same.

Guy V. Furay

Sen. Johnny Isakson, R-Ga., introduced the bill in June, along with Sen. Chris Coons, D-Del.

The Senate referred the bill to its Health, Education, Labor and Pensions (HELP) Committee. Sen. Kelly Ayotte, R-N.H., came aboard as a cosponsor in September.

President Obama has just signed the Consolidated Appropriations Act of 2016 (CAA) bill. The CAA bill postponed the Patient Protection and Affordable Care Act (PPACA) Cadillac plan excise tax for two years, postponed the start date of the PPACA medical device excise tax, given health insurers a $13.9 billion break on PPACA health insurer tax bills, and heaped new reporting requirements on the agencies that run the big PPACA commercial health insurance programs.

But the tens of thousands of active health insurance producers in the country have not had any luck with persuading the U.S. Department of Health and Human Services (HHS) to change the PPACA MLR formula.

The Senate HELP Committee has let S. 1661 gather dust.

See also: California broker to NAHU: Fight ‘abysmal state of affairs’

PPACA now requires insurers to spend at least 85 percent of large-group revenue and 80 percent of individual and small-group revenue on health care and quality improvement efforts.

Advocates of the minimum MLR system say it encourages insurers to be more efficient. Some defenders of the current system say the effects on producer comp have not been that great, and, earlier this year, some health coverage distributors were saying they had seen signs of the producer comp picture improving.

Recent reports about insurers slashing producer comp in the individual market probably have more to do with overall problems in the individual market than with the MLR system in particular, the defenders say.

But Furay and other opponents of the current system argue that it gives insurers an incentive to stop paying producers and that, within a few years, it could deprive consumers of access to a valuable source of information about insurance coverage.

“If we don’t unite collectively to get [S. 1661] passed, there won’t be a health insurance broker in the individual market,” Furay said in an email interview.

Producers may be able to survive by charging consumers service fees, as some of the surviving brick-and-mortar travel agents do when they sell airline tickets, Furay said.

But Furay said shifting to a service-fee-based system would be unfair to the consumers who are most in need of the independent advice that a licensed, heavily regulated broker can give. 

See also: 

Industry praises delay of ‘Cadillac plan tax,’ passage of Policyholder Protection Act

What happened to health broker comp?

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