MLR bill hits House in ‘steep climb’ to passage

A broker-friendly bill to combat the financial impact of the medical loss ratio requirements contained in the Affordable Care Act was filed in the U.S. House of Representatives Wednesday. A bi-partisan team of Representatives Mike Rogers (R-Mich.) and John Barrow (D-Ga.) are sponsoring the Access to Professional Health Insurance Advisors Act of 2013, known as the MLR bill, in an effort to relieve compensation restraints for health insurance brokers and agents. The bill has yet to receive a number.

“As far as movement of the bill, we need 218 votes to pass and had more than that in sponsors last year,” says Ryan Young, senior director of federal government affairs for the Independent Insurance Agents & Brokers of America known as Big “I.” The previous version in the 112^th Congress, H.R.1206, had 221 co-sponsors but did not make it to a floor vote due to a poor score by the Congressional Budget Office, according to Young.

Young says the 2013 House version is almost the same language as the Senate bill — Access to Independent Health Insurance Advisors Act of 2013 — that was introduced in late March. The Senate bill number is S.650. John Greene, the National Association of Health Underwriters’ vice president of congressional affairs, tells EBA that the only difference is that the Senate version only carves out broker compensation from the MLR for individual and small group brokers, whereas the House bill includes individual and small as well as large.

“It doesn’t really matter for large groups because their brokers can charge a fee,” says Greene. “But otherwise it mirrors the Senate bill … I think it will go down easier [with Democrats] this time with the improved language.”

Young agrees, but says there is a “steep climb ahead” regardless. “I think it can get done,” he says. “We’re working to educate CBO to shape their understanding of how the markets work and how they view that particular leap of excluding the agent compensation.” CBO’s view last time around was that this exclusion would cause premiums to go up, but Young says that’s not the case.

“While we agree with the goal of providing consumers with more value for health care dollars spent, the MLR requirements significantly and negatively impact access to health insurance agents and brokers at the very time our economy is the weakest and health care consumers need the most help,” NAHU chief executive officer Janet Trautwein said in a statement.

The MLR provision in the ACA says that 85% of large group premiums must go to benefits, leaving 15% for administrative costs and 80% of individual and small group premiums must go to benefits, leaving 20% for administrative costs.

Greene says the earlier start this year on both bills will also help the odds of passage. “We remain as committed to addressing this problem, it still remains a severe problem for a lot of brokers that I talk to — they’re hanging on,” Greene says.