For the NAIC, A Consequential Decision on the MLR

Stephen Finan, Barbara Rea, Kimberly Calder, Timothy Jost, Bonnie Burns, Lynn Quincy and Elizabeth Abbott.

First published 5/09/11 on Kaiser Health News

The National Association of Insurance Commissioners (NAIC)The National Association of Insurance Commissioners is considering whether to endorse legislation that would remove broker and agent commissions from the medical loss ratio, a calculation that could give consumers valuable insights about the proportion of their premiums spent on health care costs compared with administrative expenses and salaries. Removal would have far-reaching implications for the reliability of the MLR as a measure of a health plan’s value, for the broader goal of improving quality and controlling costs, and for the NAIC itself.

Last year, the NAIC recommended that the Department of Health and Human Services adhere to the law’s requirement that brokers’ and agents’ fees be included in the MLR. That position resulted from a thorough process that included input from interested groups representing consumers, insurers, brokers and agents, and others. The recommendation represented an equitable balancing of numerous perspectives, and HHS adopted it virtually unaltered.

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