National Association of Health Underwriters –
December 12, 2011:The Republican members of the House Energy and Commerce Committee have sent a formal letter of inquiry to the past leaders of the National Association of Insurance Commissioners (NAIC) in order to establish if the Department of Health and Human Services may have inappropriately influenced the NAIC’s actions on its initial medical loss ratio (MLR) recommendations last year. The inquiry appears to be focused on whether or not HHS pushed state regulators into a set of policy recommendations that could hurt health insurance agents and brokers.
The NAIC’s initial recommendations to HHS on the MLR that were sent last October urged HHS to accommodate producer compensation in any federal MLR rule that was promulgated, but the NAIC’s specific recommendations did not provide for a carve out of agent/broker commissions. There was an effort amongst a group of 15 bipartisan insurance commissioners leaders last year to exclude independent broker compensation from the definition the NAIC developed of earned premium for MLR reporting purposes, but at the last minute the sponsors of that recommendation pulled it back and never brought it to a vote.
This past November, the NAIC voted as a body to endorse a resolution encouraging both HHS and Congress to take expedient action to amend the MLR provisions of the PPACA in order to preserve consumer access to agents and brokers. However, HHS did not heed this recommendation in its final MLR rule promulgated on December 1. Instead, the rule continues to treat independent producer compensation as a health insurance carrier administrative expense for MLR reporting purposes.
HHS’s interim and final regulations on the MLR are nearly identical to the model regulation crafted by the NAIC last year, and Republicans seem to suspect that HHS might have led the NAIC down a very specific path in drafting those recommendations. NAHU will keep our membership updated about whatever the outcome of this congressional probe on the MLR may be.