The MLR regulations under Patient Protection and Affordable Care Act are misguided, according to AHIP attendees. An engaged crowd at Wednesday’s America’s Health Insurance Plans conference in Washington listened to a panel dissect this issue from what the speakers said were unfounded claims of carrier profitability by the government, to the restrictions placed on innovation as a result of high ratio requirements. However, none of the three speakers discussed pending legislation or regulatory action to change the current MLR rules.

Tom Wildsmith, senior manager of public policy at Aetna Inc. and the second speaker on the matter, said after the discussion that he isn’t willing to comment on any political action or inaction. In February EBA reported from the National Association of Health Underwriters conference that Congresswoman Marsha Blackburn (R-Tenn.) said she’ll back any MLR bills that go through Congress. NAHU is reportedly working with lawmakers on an updated bill to change the MLR status as it relates to broker compensation.

AHIP speaker Scott Harrington, a health care management and insurance professor at the Wharton School at the University of Pennsylvania, reminded the audience that MLR’s stated purpose is to “promote transparency, consumer value and greater efficiency of health insurers.” He said that publicly traded health insurers over the past 20 years had an average net income margin of 3.5% and posed the questions, does this show that something is really amiss; does this show that we need heavy regulations? He recapped that large group insurance profits were about 2%. “When people attack health insurance markets, they ought to be able to say that profits are excessive, and you can’t do that with these numbers,” Harrington said.

From the carrier side, Wildsmith showed the audience that the MLR rebates in 2011 total $1.1 billion. He noted that with the health insurance fee at $8 billion for its first year, “the health insurance fee will take many more dollars out of consumers’ pockets than the rebates will ever put back in.”

Randi Reichel from UnitedHealth Group also participated on the panel.

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