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MLR Waiver Bill Would Shift Power to States

Margaret Dick Tocknell, for HealthLeaders Media, September 20, 2012

In a committee hearing called to discuss HR 1206 Rep. Waxman noted a study from the nonpartisan Insurance Information Institute that estimates more than 7,000 jobs have been created in the agent and broker field since May 2011.

Others attribute any decline in agent income to industry forces put in motion well before the ACA. Commissions are often based on premiums paid so as premiums increase, so do commissions. Insurers have been working for several years to adjust rapidly increasing commissions.

The Consumers Union estimates that the exclusion of agent and broker fees from administrative expenses could reduce consumer rebates by at least 50%.

Support for HR 1206 generally falls along party lines. Republicans provide the lion's share of support, although about 20 Democrats have signed on as cosponsors of the bill. The mark-up is viewed by some as more theatrics by House Republicans in their continuing effort to discredit healthcare reform.

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3 comments on "MLR Waiver Bill Would Shift Power to States"


E. Thomas (9/20/2012 at 11:53 AM)
Two points. First, if broker and agent fees and commissions are not included as administrative expenses (the 20% bucket), surely they cannot be considerd to be related to direct patient care and/or improving the quality of care (the 80% bucket). Second, if future legislation allows the sale of health insurance across state lines, then moving the MLR waiver decision to the state level could lead to insurers basing operations in MLR friendly states.

krockholt (9/20/2012 at 11:24 AM)
Makes a lot of sense to shift power back to the states, especially with such an unpopular act. I anticipate Romney winning the election and repealing anyway.

Donald R. First (9/20/2012 at 10:22 AM)
I haven't read the bill as it stands now, but I read an earlier version. Th e ability to give States the right to change the MLR is really silly and counter Productive. When did paying commissions to broker become a state Mandate. Take a dood solid look at the texas filing last year and you will see thay had no idea what plans were being marketed or what was realistic. The MLR calculation has plenty of fat. I would advise soe tweeks. I don't think groups of 250 or more should be limited by the MLR and I would excuse them, and I would use a lower MLR on HDHP plans.