The National Association of Insurance Commissioners’ (NAIC) Health Insurance and Managed Care Committee along with several of its subgroups will hold meetings July 22-23, 2010, in Washington, D.C. The meetings will cover discussions on key issues related to the new federal healthcare law, the Patient Protection and Affordable Care Act (PPACA). These issues include health insurance exchanges, standard definitions, uniform enrollment forms, explanation of coverage, anti-fraud efforts, and implementation and enforcement issues regarding provisions that become effective on September 23. PIA will attend the meetings and provide comments to the regulators.
In addition, the NAIC has invited PIA to participate on a special July 9 call during which producer compensation related to the new health insurance exchanges will be discussed. Commissioners Linda Hall (AK), Roger Sevigny (NH), Kim Holland (OK) and Sandy Praeger (KS) will participate. This follows a conference call last week with Commissioner Hall conducted at her request with PIA to brainstorm ideas on producer compensation as it relates to Medical Loss Ratios (MLRs).
The PPACA had a significant focus on cost-containment measures and includes a requirement that certain health insurance issuers submit to the Secretary of Health and Human Services a report concerning the percentage of total premium revenue they spend on activities that improve health care quality. PIA members are concerned that “activities that improve health care quality” may be defined so narrowly as to render them meaningless.
PIA urges the NAIC to advocate for a broad approach to MLR definitions as the Department of Health and Human Services considers their guidance on this matter. We are hopeful that the definition of Medical Loss Ratios (MLRs) will include enough flexibility to incorporate producer compensation as well. We must, however, be prepared to offer alternative compensation plans should our recommendations not be accepted.
“PIA’s member agents are an integral part of the healthcare system; delivering valuable services to the customers they serve,” said PIA National President Jon Spalding. “Serving as an advocate for their clients, licensed professional insurance agents have a particular interest in ensuring that affordable coverage options exist in the marketplace. It’s what we do.”
“Congress has affirmed the valuable services independent agents provide consumers by including us as a delivery option in the health insurance exchanges,” Spalding said. “Independent agents are licensed and trained professionals who specialize in providing the right coverage specific to the needs of individuals, families and businesses. It is only fair that they are adequately compensated for their services.”
What It Means to Agents: The Department of Health and Human Services (HHS) is relying heavily on the NAIC for advice in drafting the definitions of what is included in Medical Loss Ratios (MLR). PIA will continue to be involved in this process, engaging with the NAIC and HHS to ensure that agents will be fairly compensated for selling policies offered through health insurance exchanges.
July 7, 2010