NAIC To Urge Congress To Adjust Medical-Loss Ratio Requirements
On Tuesday, the National Association of Insurance Commissioners voted 26-20 during a conference call to approve a measure that calls for Congress to pass legislation to change the medical-loss ratio regulations, The Hill's "Healthwatch" reports (Baker, "Healthwatch," The Hill, 11/22).
Under the MLR rule included in the federal health reform law, private insurers are required to spend at least 80% in the individual market or 85% in the group market of their premium dollars on direct medical costs. Insurers that do not comply with the ratio will have to issue rebates to consumers.
The reform law allows states to request adjustments if they can prove enacting the new limits would immediately destabilize the state's insurance market (California Healthline, 9/12).
The NAIC resolution calls on lawmakers to consider bills that would exempt insurance agents' commissions from being counted as administrative expenses. According to brokers, health insurers are cutting commissions in order to reduce their administrative costs (Adams, CQ HealthBeat, 11/22).
The resolution also asks HHS to take "whatever immediate actions," including "an immediate hold on implementation and enforcement" of the MLR rule, to allow consumers to continue to use insurance agents and brokers.
Agents and brokers have been pushing for such a measure for more than a year. However, the NAIC resolution stops short of endorsing a bill (HR 1206) -- sponsored by Rep. Mike Rogers (R-Mich.) -- that would exclude commissions from the definition of administrative expenses ("Healthwatch," The Hill, 11/22). The bill has 138 co-sponsors, including 18 Democrats.
According to CQ HealthBeat, the vote likely will result in ramped up lobbying for Congress to take up the issue in the next session (CQ HealthBeat, 11/22).
California Insurance Commissioner 'Disappointed' by Vote
California Insurance Commissioner Dave Jones (D) was one of 19 state insurance commissioners to vote against the resolution. In a statement, Jones said he was "very disappointed" by the vote.
Jones said he opposed the resolution because it would:
- Reduce consumer rebates and access to care; and
- Hike consumers' health insurance costs.
Jones also said he opposed the measure on process grounds because the commission did not accept public comment or have an NAIC panel examine the resolution.
In addition, Jones objected to the vote because he said all the commissioners did not have adequate time to review it (Lake County News, 11/22).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.