(Austin, TX) The more consumer-friendly state insurance commissioners here at a national meeting are raising eyebrows over attempts to rush a really big vote that would jack up health insurance premiums in order to pay more to insurance brokers. The issue is whether the official National Association of Insurance Commissioners will put its official stamp of approval on legislation written by and for the brokers.
The legislation, being carried in Congress primarily by Rep. Mike Rogers of Michigan, would remove insurance broker fees of up to 20% from insurers' accounting of administrative costs. Insurers would then have no problem showing that they spent 80% or 85% of health premium dollars on health care, and only 15% to 20% on overhead an profit. The only certain result of this legislation is that brokers would get higher pay, insurance companies would be free to raise premiums and consumers would get hit even harder on premium increases.
Here's Watchdog's official, and not approving, comment to the NAIC about the whole idea. We're hoping that more commissioners will join a core group of questioners, including California Insurance Commissioner Dave Jones, who want to know a whole lot more about this legislation before taking any vote. Sen. David Rockefeller has the "no-stone-unturned" critique here. Blistering but polite.
The legislation's chief backer in the NAIC is Florida Insurance Commissioner Kevin McCarty, McCarty also backs a federal waiver that would cancel all of the so-called medical care ratio requirements for Florida. If that comes through, health insurers and brokers in this large state would get a double profit bonus, straight from the pockets of consumers and taxpayers.
I'll be speaking on a panel this afternoon–trying to summarize all the unanswered questions, and unintended (and intended) conserquences of this special-interest legislation. More to come.