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House panel passes bill to ease rules on insurers, brokers
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09/20/12 01:30 PM ET
The House Energy and Commerce Committee voted Thursday to change rules in President Obama's healthcare law that govern insurers' spending.
The panel passed a bill to exempt insurance agents' commissions from the law's medical loss ratio (MLR) calculation. Republicans say the bill would protect the jobs of agents and brokers, while Democrats say it would weaken an important consumer protection.
The healthcare law requires insurance companies to spend 80 or 85 percent of their premiums on healthcare costs, leaving only the remaining 15 or 20 percent for profit and administrative expenses. Under the Energy and Commerce bill, agents and brokers' commissions would not count toward insurers' administrative costs.
Agents say the MLR threatens their jobs because insurance companies will scale back premiums to leave more room for profits. Opponents of the bill say the MLR was designed to ensure that consumers get value for their premium dollars and don't want to weaken those standards.
