4. Concerns about brokers and agents are legitimate, but there is more to consider.
Most states contend that the MLR is squeezing broker commissions and jobs, and then they submit some supporting comments from brokerage firms. That's not the way to go.
In denying Delaware's waiver application, CMS noted that eight out of nine Delaware issuers that reported data to the National Association of Health Insurance Underwriters didn't reduce broker commissions between 2010 and 2011.
And keep in mind that the CMS standard is that consumers must simply have adequate access to brokers and agents. Just because commissions fall and jobs disappear doesn't mean access changes.
By the way, broker commissions may not be an issue much longer. In Congress the MLR is about as popular as the Independent Payment Advisory Board. House members have held a series of hearings about the MLR's negative effect on broker jobs and commissions. At issue is the inclusion of the fees in the 15% to 20% non-claims or administrative costs category. Brokers have lobbied hard to get Congress to step in and make the change and two bills, HR 1206 and S 2068 will do just that.
So now it's on to the 2012 requests, which should begin arriving at CMS sometime after April 1. Most states contacted by HealthLeaders Media said it was too early to release any information on a potential waiver request, but I'll be keeping an eye on all those states during the next round.