NAIC Sides With Brokers in MLR Tussle

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Consumers advocates fume as commissioners recommend that Congress amend Affordable Care Act to exclude broker commissions from medical loss ratio.

The National Association of Insurance Commissioners ( voted to exclude broker commissions from calculations of medical loss ratio required under the Patient Protection and Affordable Care Act.

By majority vote, the NAIC endorsed a resolution ( urging a reworking of MLR rules. "Congress should expeditiously consider legislation amending the MLR provisions of the PPACA in order to preserve consumer access to agents and brokers," the resolution states. "The Department of Health and Human Services should take whatever immediate actions are available to the Department to mitigate the adverse effects the MLR rule is having on the ability of insurance producers to serve the demands and needs of consumers and to more appropriately classify producer compensation in the final PPACA MLR rule."

The Independent Insurance Agents & Brokers of America ( (IIABA), which has lobbied for a change to the MLR rules, cheered the NAIC vote. “The IIABA applauds the NAIC for its recognition of the detrimental impact the MLR calculation has had on independent insurance agency small business owners, consumers, and their agents and brokers,”  IIABA President and CEO Robert Rusbuldt, said in a statement. “If the MLR formula is not corrected soon, consumers will suffer the prospect of losing the professional, licensed guidance of insurance agents during this time of great change in the health insurance market.”

Conversely, the NAIC vote elicited a scalding riposte from consumer advocates, who accused the NAIC of selling out consumers and warned the vote would damage the reputation of the NAIC as an objective voice on health insurance matters. "The NAIC cannot survive after this vote as a trusted advisor to all of the states on insurance laws and regulations," said Judy Dugan, research director of Consumer Watchdog, in a statement. "For years it billed itself as a data-driven consensus organization, sometimes to the detriment of consumers. Now, on an issue that is blatantly pro-industry, and of certain harm to consumers, a bare majority has tossed caution and consensus overboard."

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