Health Care MLR Issue Prompts Discussion, Protest At NAIC Meeting

NU Online News Service, Aug. 16, 3:16 p.m. EDT

SEATTLE–A meeting of insurance regulators and state legislators was interrupted by protestors who say health insurance company lobbyists are working to block states' efforts to implement the recently passed health care reform legislation.

During the summer meeting here Saturday of the National Association of Insurance Commissioners, the state Government Liaison Committee meeting was interrupted by a group of protestors yelling that there was an "infestation of lobbyists" in the room. They handed out "lobbyist pandemic kits." The protestors quickly left the room before security could arrive.

Outside of the Washington Convention Center, a group of about 60 protestors were handing out the kits to meeting attendees as they exited the building.

Joshua Welter, a spokesman for the Washington Community Action Network, which organized the protest, said the group was there to support the insurance commissioners' efforts to institute the reforms, specifically the medical loss ratio (MLR), which is aimed at determining how much of the carrier's premium will be directed toward payment of health care claims versus administrative costs.

Under the recently passed federal Patient Protection and Affordable Care Act, insurers will have to spend 80 percent of the premiums they collect on health care and the remaining 20 on administrative costs. For larger carriers the split will be 85/15 percent.

"We have to support the insurance commissioners against more than a thousand lobbyists," said Mr. Welter.

He said the protestors were having some fun but at the same time wanted to underscore the seriousness of the topic.

"The money should be going to people's health care, not to health care companies' profits," he said. "This is an important thing that is affecting many people's lives."

Meanwhile, speaking before the NAIC, consumer advocate Wendell B. Potter, a member of the Center for Media and Democracy (CMD), told regulators they need to champion consumer interests rather than health care companies as they make a decision–possibly as soon as Tuesday during the current NAIC meeting–on the form insurers will use to report their MLR.

Mr. Potter, who was a public relations executive with a major health care insurer before joining the CMD, said the for-profit insurers, dominated by seven large carriers, will manipulate their MLRs to improve earnings and, in turn, enhance shareholder value.

He called on the NAIC to keep the narrow scope of the current form proposal and not allow health insurance interests to broaden the definition of the MLR calculations.

"A lot of people are watching what you are doing here," he said.

He said he understands the pressure exerted by Wall Street interests on the writing of these rules is intense, but commissioners should not give in to them.

"You are the ultimate consumer representatives, and we trust that you will decide what is in their best interests and that premium dollars will go to their needs," he declared.

Addressing fellow regulators at the NAIC's 201^st meeting, Jane L. Cline, NAIC president and commissioner of insurance for West Virginia, said the NAIC's work has been dominated by implementation of health care mandates by the states.

She said NAIC working groups have held more than 280 meetings on the subject since passage of the Patient Protection and Affordable Care Act and received over 400 documents from "interested parties." The NAIC's conference call bill alone stands at $80,000, she said to illustrate how much effort the NAIC is putting into implementation.

"Our challenge is enforcement," she said, adding that there needs to be an open and transparent process as "we all have a hand in the future of health care."

A presentation by Kansas Insurance Commissioner Sandy Praeger noted that regulators' health care responsibilities include speed-to-market form and rate filings, where the major concern commissioners have is that premiums are adequate to avoid insolvency but are not excessive. The carriers will also have to furnish reports to Health and Human Services for review and determine if premiums are excessive.

Policy language will also need to be uniform and understandable for consumers, she said.

The states have until 2014 to set up health insurance exchanges, and Commissioner Praeger said the states have an obligation under the law to set up such exchanges before the federal government steps in.

"When you stop and think about it, we have just scratched the surface on implementation issues," she observed. "The work is ongoing.