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MLR: Insurance Perspective

Posted By Administration, Tuesday, February 23, 2016

 Mike Becker
PIA National has opposed the Affordable Care Act’s medical loss ratios (MLR) from the outset. The law says insurers must use 80% to 85% of all premiums for the health care of insureds. That left 15% to 20% for administrative costs. The association tried in vain to get the Department of Health and Human Services (HHS) to not include agent compensation in the MLR and to understand how much putting them in the MLR impacts the independent insurance agent’s compensation.


PIA National Executive Vice President & CEO Mike Becker said as a result of the HHS decision, health insurance agent and broker compensation has been slashed. That led to an exodus of qualified, licensed agents and brokers capable of serving people in ACA-backed plans. “The current interpretation of the MLR formula is hurting independent agents and the individuals and small businesses they serve. Congress needs to fix this,” he said.


Thus, the PIA has supported legislation in both the House and Senate that will fix the MLR crisis. And the PIA has lots of support. The latest comes from Guy Furay. He is the president of The Insurance Source and Insure-u.com.


Furay recently wrote an op-ed piece for the online publication Employee Benefit Advisor. He said defended agents and said, “Due to the MLR provision, Aetna, Anthem, Humana, United Healthcare, Healthspan, and BlueCross BlueShield of North Carolina are now paying brokers the sum of $0.00 for our hard work. Brokers in NC have only 3 carriers to present to individual clients: Aetna, United Healthcare and BlueCross BlueShield of NC. None will now pay brokers a dime for everything that we do.”


Exactly what the PIA has been saying since ObamaCare became law.


Furay continued, “The MLR provision is the very worst part of the ACA, and it places constant pressure on the insurance companiesbottom lines. The rules of the game are these: You cant make much money, but you can lose a whole lot if things dont go your way.”


Like the PIA, Furay supports Senate bill 1661 — The Access to Independent Health Insurance Advisors Act of 2015 — proposed by Delaware Democrat Sen. Chris Coons and Georgia Republican Sen. Johnny Isakson. And like the PIA, Furay suggests agents call, email or write these and their own senators to get this bill passed and the law changed.


“Recognize that these Senators have the power to fix this problem should they choose to do so. Stress the bipartisan nature of the bill, and keep your points to S. 1661 and S. 1661 only, because issues surrounding the ACA are so thoroughly politicized that some will immediately tune you out if you go off on a tangent,” he wrote.


Here’s what Furay says is the bottom-line:


  Without passage of this bill, the role of the broker as we know it will die.

  Many of us could survive by charging consumers directly for our services, but this has a very significant and undeniable “adverse impact” on poor and minority communities.

  The chances of this bill ever making it out of committee without aggressive broker action are very slim.

  There are over 100 bipartisan cosponsors of a companion bill in the House.


Source links: PIA National, Employee Benefit Advisor

Tags:  Insurance Content  Insurance Industry  Insurance News  Medical Loss Ratios  MLR: Insurance Perspective  Weekly Industry News 

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