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House panel readies bill to alter health law's medical loss ratio
A feature of President Obama's healthcare law often touted by Democrats would change under a House bill now ready for mark-up.
The measure (H.R. 1206) from Rep. Mike Rogers (R-Mich.) would alter the law's medical loss ratio (MLR) by excluding insurance brokers' fees from counting as administrative costs under the requirement.
The medical loss ratio mandates that insurers spend no less than about 80 percent of their premiums on medical care rather than administrative costs or profit, or rebate the difference to policyholders.
But Rogers's bill seeks to placate brokers unhappy that their fees are included in the MLR.
Agents say the status quo threatens their business by incentivizing insurers not to work with brokers as they try to maintain profits.
The measure, likely to pass the Energy and Commerce Committee on Thursday, would remove brokers' commissions from the MLR.
Panel chairman Fred Upton (R-Mich.) argued in a subcommittee hearing that under the MLR policy "it will become harder to shop for a plan you like and can afford" as agents see less business.
But some healthcare experts say insurance brokers are victims of an increasingly unfriendly market, not just the MLR.
Some Democrats have argued that Rogers's bill would weaken standards designed to protect consumers' premium dollars.
The Energy and Commerce Committee will also mark up the Strengthening Medicare and Repaying Taxpayers Act (H.R. 1063), making several minute changes to the Medicare Secondary Payer program, on Thursday.
—This post was updated on Wednesday at 10:57 a.m.
