Group Takes Aim At Bill Seeking Agent Commission Exemption

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A consumer advocacy group attacked a bill before Congress seeking to exempt insurance agent and broker commissions from the medical loss ratios, calling it “special interest legislation.”

Consumer Watchdog said “insurance salespeople,” referring to members of the Independent Insurance Agents & Brokers of America (Big I) holding their annual legislative in Washington, D.C., this week, are lobbying Capitol Hill for a bill “that would gut federal health reform cost-saving rules and increase consumer health insurance premiums to protect brokers’ sales commissions.”

Members of the Big I and other insurance trade groups have been lobbying members of Congress, as well as state insurance regulators and state legislators, to exempt insurance agent and broker commissions from the medical loss ratios, which regulate how much health insurers can spend on non-medical costs, including agent compensation.

A bill before Congress, sponsored by Reps. Mike Rogers (R-Mich.) and John Barrow (D-Ga.) would exempt agent and broker commissions from the ratios, which forced health insurers, starting Jan. 1, to commit 80% of individual and small-group premiums, and 85% of large-group premiums to medical expenses.

“This bill is not a small change to an isolated piece of the health reform law,” said Carmen Balber, Washington director for Consumer Watchdog, in a statement. “It is an attack on health reform’s central requirement that insurance companies eliminate excessive overhead spending and profits.”Consumer Watchdog said Rogers received $16,000 and Barrow collected $12,500 in campaign donations from “insurance sales lobbying associations.

Balber said approval of what he described as “special interest legislation…will eliminate one of the few provisions in health reform that is meant to make health insurance more affordable. Consumers will pay more in health insurance premiums and lose out on one and a half billion dollars in rebates.”

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