Harrington, whose testimony may be read in full here, said MLR regulations should be replaced with pro-competitive reforms that would encourage states to adopt policies that promote informed competition and consumer choice, including targeted minimum standards for state regulation, and providing the states with flexibility to meet regulatory objectives given differences in consumer needs, preferences, and economic conditions.
Speaking in support of the medical loss ratio, Terry Gardiner, vice president for policy and strategy at the Small Business Majority said that without the MLR "healthcare reform would lack the teeth needed to lower health insurance premiums and hold insurers accountable for unnecessary overhead costs that have nothing to do with medical care and more to do with poor accounting policies and minimal oversight."
He added that "the MLR will help keep premiums down so small businesses can save on healthcare-related expenses and invest in their companies. That means more jobs and greater economic growth."
In his testimony, executive director of Health Care for America Now Ethan Rome noted the MLR rule has already helped cut rates for Aetna subscribers in Connecticut where the insurer expects to pay customer rebates for 2011 for not meeting the MLR standards. Rome stated that across the country "premiums have risen sharply…..three times greater than wage growth. Insurers blame these increases on the rising cost of medical care, yet premiums have been going up at double the rate of medical inflation as gauged by the Bureau of Labor Statistics."
He opposes any effort to remove broker commissions from the MLR. "We need Congress to work on behalf of consumers to protect the ACA from efforts to undermine it, such as the proposal to weaken the MLR by giving a special break to health insurance brokers. If the broker commissions are taken out…premium rates will continue to increase even as healthcare costs drop."