The U.S. Senate bill that would take broker compensation out of the medical loss ratio equation hasn’t moved in the month since it was introduced, not surprising given the nearly two weeks of Easter and Passover recess and outings by top administration officials to discuss broader issues like the budget in front of Senate committees. So what are the chances of this bill gaining ground in the 113th Congress?
“It depends on how rocky the rollout [of the ACA’s exchanges] is in October and if the rollout is really rocky, I’d imagine that more expansive modifications will take priority,” says Scott Harrington, professor of health care management and business economics and public policy at The Wharton School at University of Pennsylvania. “There will be a tendency to not pass narrow legislation.”
Despite some skeptics about the rollout going well, including Sen. Max Baucus (D-Mont.) who was an architect of the Affordable Care Act, Harrington says it remains to be seen what will really happen come October.
The MLR bill, S.650, was introduced in late March by Senators Mary Landrieu (D – La.), Johnny Isakson (R – Ga.), Mark Begich (D – Alaska) and Lisa Murkowski (R – Alaska), as previously reported by EBA. Spokespersons for Landrieu and Isakson said this week that they have no update on the bill moving to hearing in the Senate Small Business Committee, which Landrieu chairs. John Greene, vice president of congressional affairs at the National Association of Health Underwriters, helped craft the bill and says there will be a hearing but the next step is for Landrieu and Isakson to build more co-sponsors once the Senate returns for its current recess this week.
“No one’s going to do anything until they see the evidence,” Greene says, referring to forthcoming information on the carriers that will be on the federal public exchange and other unknowns from the Department of Health and Human Services like rate data. “And the situation in different states will change. Greene is working now to lay the foundation for a similar broker-friendly MLR bill in the U.S. House of Representatives. He says the first step is working with the Congressional Budget Office because that group’s assumption is that the MLR regulation has held premiums down.
Harrington, who speaks often at insurance industry conferences, thinks the sentiment of the law is important for industry at this point in time. He supports an overall repeal of MLR regulation and has written extensively about how carriers and plan sponsors weren’t actually making the massive profits that those who pushed for this regulation thought they were making.
“Overall I think consumers and the marketplace would benefit from things that reduce some of the red tape, carving out brokers would be one way of achieving that,” Harrington says.
Previous broker-friendly bills on the MLR were introduced in the 112th Congress. The Senate bill in the last session never went to hearing.
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