NU Online News Service, March 16, 12:01 p.m.EST

WASHINGTON—Sen. Jay Rockefeller, D-West Va., called outthe National Association of Health Underwriters and FloridaInsurance Commissioner Kevin McCarty, saying their lobbying foragent exemptions from the medical loss ratio "will cost Americanconsumers $1 billion in benefits."

Sen. Rockefeller's comments came in a letter to the NationalAssociation of Insurance Commissioners (NAIC), which plans to holda hearing on producer compensation at its upcoming spring meeting,March 27 in Austin, Texas.

It also comes as Rep. Mike Rogers, R-Mich., and John Barrow,D-Ga., prepare to introduce legislation that would exempt agentcommissions from the MLR.

The MLR provision in the Patient Protection and Affordable CareAct (PPACA) requires health insurers to spend at least 85 percentof large group revenue and 80 percent of individual and small grouprevenue on health care and quality improvement efforts. Theremaining percentage may be spent on administrative costs. Agentshave been pushing to exclude their commissions from counting towardthe administrative costs.

NAHU, the National Association of Insurance and FinancialAdvisors, and the Independent Insurance Agents and Brokers ofAmerica are all supporting the Rogers/Barrow legislation.

"A legislative fix of the MLR issue is crucial," said DianeBoyle, NAIFA vice president of federal government relations. "Quickcongressional action is the best way to ensure consumers don't losevaluable services—from claims assistance to small-business HRfunctions—that licensed insurance agents provide their clientsevery day."

She also cited Maine's efforts to get an exemption from the MLRto help both agents and brokers and the small insurers who operatein the state.

"Maine's difficult, six-month effort to procure an MLR exemptionshows that a broader fix is needed," Ms. Boyle added. "We believethe bipartisan Rogers-Barrow legislation would provide that."

In his letter to the NAIC, Sen. Rockefeller said he disagreedwith the NAIC's decision to reopen the issue.

He also said he "wholeheartedly shares your appreciation for thevaluable work that licensed insurance agents and brokers do onbehalf of their customers," and "recognizes the valuable roleagents and broker play in helping American consumers and businessespurchase health insurance."

But, he said, "I cannot support a proposal that would allowagents, brokers and health insurance companies to retain theestimated $1 billion in benefits that American consumers willreceive next year thanks to the health care reform law."

He said the purpose of the law's MLR was to encourage healthinsurance companies to deliver health care services to theircustomers in a more efficient and cost-effective way.

"While many insurers were already delivering health care atlevels that meet or exceed the law's minimal MLR targets of 80percent and 85 percent, many others were not.

"I am encouraged by the fact that the new law is prompting manyhealth insurance companies that were not meeting these targets toconduct a long-overdue review of their business operations and makechanges that will result in higher-quality care and lower premiumsfor their customers," Sen. Rockefeller said.

The NAIC hearing will be held by the Professional HealthInsurance Advisors Task Force, an arm of the Executive Committee ofthe NAIC.

The task force will be hearing comments from all interestedparties about the possible impact of the new MLR rules onproducers, insurance consumers and insurance markets.