MLR Waiver Bill Would Shift Power to States

Margaret Dick Tocknell, for HealthLeaders Media , September 20, 2012

The waiver provision is discounted as a "totally political provision with no serious policy considerations behind it, " Ethan Rome, executive director of the advocacy group Health Care for America Now, told HealthLeaders Media. "This is not a case of state versus federal rights. Most state insurance offices don't have the capacity to do the necessary market analysis."

What seems to be lost amid a lot of political rhetoric is that health insurers have been taking the steps to adjust their company operations to reflect the new MLR reality. Still, there's no mistaking that they don't favor the MLR rule, which America's Health Insurance Plans says "completely ignores" the real driver of healthcare expenses—soaring medical costs.

The waiver provision hasn't received as much attention as the section of HR 1206 that would amend the PPACA MLR rule to exclude broker and agent fees and commissions from administrative expense calculations. That industry and political battle has been raging for more than a year.

Supporters of the exclusion, such as the National Association of Health Underwriters, say that agents and brokers face "a desperate economic situation" that can be attributed to job losses and lower incomes that it blames on MLR requirements. The group contends that because agents and brokers are mostly self-employed, their commissions shouldn't be considered administrative expenses.

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3 comments on "MLR Waiver Bill Would Shift Power to States"

E. Thomas (9/20/2012 at 11:53 AM)
Two points. First, if broker and agent fees and commissions are not included as administrative expenses (the 20% bucket), surely they cannot be considerd to be related to direct patient care and/or improving the quality of care (the 80% bucket). Second, if future legislation allows the sale of health insurance across state lines, then moving the MLR waiver decision to the state level could lead to insurers basing operations in MLR friendly states.

krockholt (9/20/2012 at 11:24 AM)
Makes a lot of sense to shift power back to the states, especially with such an unpopular act. I anticipate Romney winning the election and repealing anyway.

Donald R. First (9/20/2012 at 10:22 AM)
I haven't read the bill as it stands now, but I read an earlier version. Th e ability to give States the right to change the MLR is really silly and counter Productive. When did paying commissions to broker become a state Mandate. Take a dood solid look at the texas filing last year and you will see thay had no idea what plans were being marketed or what was realistic. The MLR calculation has plenty of fat. I would advise soe tweeks. I don't think groups of 250 or more should be limited by the MLR and I would excuse them, and I would use a lower MLR on HDHP plans.




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