Our colleague Beth Abbott is currently in Washington, DC, as a designated consumer representative at the National Association of Insurance Commissioners meeting, where she is fighting a surprise proposal to undermine a key consumer protection. While California Insurance Commissioner Dave Jones has spoken against the change, it is unclear how the body will act as a whole.
The proposal would weaken the medical loss ratio rule-which requires that at least 80% of a health insurance premium goes to patient care rather than administration and profit–by removing broker commissions from the calculation. The last-minute announced resolution urging Congress and HHS to take agents and brokers out of the medical loss ratio (MLR) equation is being circulated at the NAIC meeting in Washington and could come to a vote this weekend.
The NAIC’s own figures estimate health insurance customers would miss out on over $1 billion in rebates. Last June, when the NAIC took up a similar recommendation, more than 10,000 consumers wrote to their insurance commissioner expressing disappointment and opposing the effort.
The MLR rule, designed to rein in health insurance premiums, is already working. Earlier this year, Aetna announced that it would reduce premiums for Connecticut policy holders by 10% on average, citing the MLR rule.
Complaints that the rule is forcing brokers and agents out of business are simply not substantiated by the facts. According to the NAIC’s own study, states that already have high MLR requirements have reported no impact on the availability of agents or brokers.