The healthcare reform bill unveiled by Senate Democrats preserves the ability of agents to sell policies offered by proposed health insurance exchanges – but adds troubling language that could weaken the ability of agents to participate. The language also indicates that the Secretary of Health and Human Services would have the authority to issue “rate schedules for broker commissions paid by health benefits plans offered through an exchange,” rather than permitting such commissions to be negotiated in the marketplace.

The bill stipulates that the HHS secretary is required under these provisions to “establish procedures under which a state may allow” (but is not required to permit) “agents and brokers to enroll individuals” in exchange plans.

The bill also requires the secretary of Health and Human Services to promulgate regulations that would apply to the state exchanges to ensure that any Navigator “is qualified, and licensed if appropriate” [our emphasis added].

What It Means to Agents:  Unlike the healthcare bill passed by the House, the Senate bill weakens the position of agents and brokers. It invests in one federal bureaucrat – the Secretary of HHS – the authority to decree how much agents and brokers could be paid for selling policies offered through state exchanges. It leaves the door open to individual states not permitting licensed agents and brokers to participate. And it specifically allows for unlicensed individuals to serve as “navigators” – essentially, unlicensed competitors for agents and brokers.

As this bill is debated, it will be open to amendment on the Senate floor. PIA will work to have this section of the bill amended to better protect the interests of agents and brokers.

Legislative Process: With this coming down to the wire, here’s a brief primer on the process and likely prospects.  Prospects for the entire bill in the Senate are questionable because of solid opposition by Republicans. Still, if Democrats are able to maintain the 60 votes needed to maintain cloture, a bill with amendments could conceivably get to a final vote. At that point 60 votes will still be needed to break another filibuster and proceed to a final vote. If that happens, the bill itself could then pass with 51 votes.

If Republicans stage a filibuster that Democrats can’t break, the process will bog down but not necessarily end right away. Deals can be cut on the Senate floor to overcome filibusters. But with the 60-40 split in the Senate, one defection that holds can halt anything. Then, Democrats could attempt to move the bill under reconciliation, a more complicated process requiring just a simple majority vote.

If the entire process breaks down, there will be no healthcare bill. This result is less likely than something eventually passing one way or another. If it does, Senate and House bills will have to be reconciled by a conference committee, with the reconciled version again passed by both the Senate and House and signed by the President before becoming law.

‘Navigators’ Provision Concerns Industry (National Underwriter 11/19/09)

November 24, 2009