WASHINGTON BUREAU — Federal officials worked behind the scenes to turn the National Association of Insurance Commissioners (NAIC) medical loss ratio (MLR) decision-making process against agents, according to leaders of the Independent Insurance Agents and Brokers of America (IIABA).
Robert Rusbuldt, president of IIABA, Alexandria, Va., and Charles Symington, IIABA's senior vice president, government affairs, talk about the NAIC's MLR proposal deliberations in a letter submitted to the U.S. Department of Health and Human Services (HHS).
Rusbuldt and Symington wrote the letter in response to an HHS request for comments 
on MLR legal issues and ways to help agents continue to play a role in health insurance.
The MLR provisions in the Affordable Care Act package require insurers and health plans to spend 85% of large group premium revenue and 80% of individual and small group premium revenue on health care and quality improvement efforts. Republicans in Congress are trying to repeal or block implementation of the Affordable Care Act, but, if the MLR regulations take effect as written, the new administrative expensive limits could encourage insurers to reduce or eliminate agent commissions, producer groups argue.
The NAIC developed an MLR implementation proposal that became the basis for the HHS interim final MLR regulations.
IIABA and other producer groups have been arguing that commissions should be excluded from the MLR calculations, because customers are the ones who really pay the commissions. Insurers simply collect commissions for the convenience of customers and producers, the producer groups say.
While the NAIC was considering the MLR issue, a bipartisan group of 15 regulators supported an amendment to the NAIC's proposal that would have excluded commissions from MLR calculations, Rusbuldt and Symington say.
"HHS officials played an active role as the deliberations on the NAIC recommendations came to a close during the organization's Fall National Meeting in October," Rusbuldt and Symington say. "Federal representatives reportedly weighed in on the matter
outside of the public eye, discouraged NAIC leaders from considering the popular and broadly supported amendment, and influenced what should have been an impartial and independent decision-making process among state insurance regulators. HHS officials never offered input or suggestions on this matter during the many weeks of public consideration or submitted comments in written form."
HHS did allow for up to 3 years of adjustments in the MLR standards in states that show that meeting the new MLR requirements would destabilize their individual markets, Rusbuldt and Symington say.
"We feel these 'adjustments' are insufficient since they are, as noted, temporary and only apply to the individual market," Rusbuldt and Symington say.
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