Senators Johnny Isakson (R-Ga.) and Chris Coons (D-Del.) are once again sponsoring a bipartisan bill to revise the Affordable Care Act’s medical loss ratio requirements. The Access to Independent Health Insurance Advisors Act, reintroduced Thursday, mirrors a bill in the House that specifically excludes agent and broker compensation from the medical loss ratio formula enacted in the ACA.
The pair previously introduced the legislation in June of 2015, where it did not move past committee.
“The MLR rules have a detrimental impact on agents and brokers, as well as consumers who rely on these professionals for advice,” says National Association of Health Underwriters CEO Janet Trautwein. “The act clarifies that agent compensations is not an insurance company administrative expense, which provides much-needed relief to agents and brokers, who are needed now more than ever to help consumers navigate all of the post-ACA health insurance changes.”
The MLR provision of health reform requires insurers to use at least 80% of premium — 85% for large employer plans — on healthcare expenses and quality improvement, rather than overhead profit.
This has caused serious harm to agents and brokers and their ability to provide essential services to the clients who depend on them to assist with finding appropriate coverage, NAHU believes. “Due to the mass exodus of agents and brokers from the marketplace, small businesses are having a very difficult time accessing affordable insurance,” Trautwein says.
The MLR has also impacted the number of health insurers doing business in the small-group markets. By including agent and broker commissions as part of their administrative costs, many new or smaller insurers are not able to meet the requirements of the MLR while supporting the agents and brokers who serve their clients, NAHU says.
“Our priority should always be to protect consumers and small businesses, ensuring they have access to the best possible health care coverage,” said Sen. Coons, in a statement announcing the bill. “Our bipartisan bill will fix a provision in the healthcare law that is currently making it harder for independent agents and brokers to stay in business and serve consumers.”
The void has left consumers underserved, reduced competition and caused countless insured individuals to lose coverage. “We look forward to working with members of Congress and the administration on the enactment of this important bipartisan legislation to help ensure that the professional, licensed guidance of insurance agents and brokers remain available to consumers,” Trautwein says.
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