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North Carolina Wins Delay in MLR, PIA National Comments

Federal regulators last week allowed North Carolina insurers a one-year delay in meeting a benchmark requiring that more of each health insurance premium dollar to go toward medical services and less toward overhead
February 22, 2012

Federal regulators last week allowed North Carolina insurers a one-year delay in meeting a benchmark requiring that more of each health insurance premium dollar to go toward medical services and less toward overhead. The decision by the U.S. Department of Health and Human Services (HHS) grants the state a one-year delay to an adjustment of 75 percent from 80 percent for 2011 only. Following the HHS ruling, PIA National issued the following statement to North Carolina Public Radio:

“We appreciate the Department of Health and Human Services (HHS) approving the North Carolina Department of Insurance’s request to temporarily adjust the applicable medical loss ratio standard, providing insurers in North Carolina with additional time to adjust to the many changes being brought about as a result of the Affordable Care Act. This underscores the importance of state-based insurance regulation and the good work done by the North Carolina Department of Insurance on behalf of consumers.

“However, for independent agents and brokers who own and operate small businesses in North Carolina, this ruling doesn’t address a big problem. Despite the federal government stipulating that consumers have the right to consult licensed insurance professionals as they seek health insurance coverage, HHS has included compensation of agents and brokers as part of the medical loss ratio formula.  This has the effect of slashing the compensation of insurance agents in North Carolina, making it difficult for them to stay in business and assist consumers.”

“Licensed insurance agents provide a wide range of services for both individual consumers and the business community, guiding consumers through a complicated process, providing quotes and scrutinizing plans while ensuring that North Carolina residents consider the best options available to them. It’s only appropriate that they are fairly compensated and as such, their compensation should be calculated completely outside of any medical loss ratio formula.”

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