MLR Testimony Heard by House Subcommittee

Margaret Dick Tocknell, June 6, 2011

Political lines were quickly drawn at Thursday's meeting of the House Energy and Commerce Committee's subcommittee on health where testimony about medical loss ratios was heard from representatives of small businesses, insurance underwriters, policy analysts, consumer advocates and health plans.

Chairman Joe Pitts (R-PA) said he called the meeting to "review the healthcare law's regulatory burden." Frank Pallone Jr. (D-NJ) countered that the meeting was "nothing more than another effort on the part of Republicans to undermine healthcare reform."

The Affordable Care Act requires health plans to spend 80% to 85% of premium revenue on reimbursements for clinical services and activities that improve health care quality. The Department of Health and Human Services has issued regulations defining activities that improve health care quality or fall within the department's definition of clinical services.

Rep. Pitts noted HHS's "vast control over the design of private health insurance coverage irrespective of consumer healthcare preferences."

A number of witnesses spoke in opposition to the MLR, which they said cause problems for brokers and could limit access to popular plans such as high-deductible health plans. Janet Trautwein, CEO of the National Association of Health Underwriters, said agents and brokers are facing a "desperate economic situation" because of the MLR requirement. She testified that because agents are mostly self-employed, their commissions shouldn't be considered administrative expenses.

Margaret Dick Tocknell Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.


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