Final Medical Loss Ratio Rule Rebuffs Insurance Agents

The Obama administration issued a rule today that is sure to disappoint insurance agents: Fees paid to brokers and agents won’t count as medical care, under limits imposed on insurers in the 2010 federal health law.

That’s key because under the health law, insurers must spend at least 80 percent of their premium revenue on medical care and quality improvement — or issue rebates to consumers. The target is 85 percent for large-group issuers.

Brokers had lobbied hard to have their fees exempted from the calculation of administrative costs, which also includes such expenses as marketing and executive salaries, saying that without such a move, commissions will be cut and agents could lose their jobs, leaving consumers without as much access to brokers who help them choose health insurance.

Read the full report at: http://capsules.kaiserhealthnews.org/index.php/2011/12/final-medical-loss-ratio-rule-rebuffs-insurance-agents/

Click here to see the full MLR final rule and a related interim rule or read the HHS fact sheet.

Source: Kaiser Health News