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What States Should Consider When Building Their Health Insurance Exchanges

Our recent health care reform law Patient Protection and Affordable Care Act requires states to create the own health insurance exchanges. These exchanges are virtual market places where buyers and sellers of health insurance can meet-up. It’s not so simple. Many considerations must be taken into account when creating these exchanges and the many stakeholders involved.

Milliman does a pretty good job outlining critical points states should consider.  One is structuring the exchanges, two is setting the terms of participation, and three is the plan designs.

Virginia’s Secretary of Health and Human Resources has done a good job laying out some of our initial work on the health reform initiatives. Read Secretary’s report here.

Health Care Reform Bill to save consumer choice: HR 1206, Take Action Now

Michigan Representative Mike Rogers (R-8) and Georgia Representative John Barrow (D-12), along with 14 bi-partisan cosponsors, introduced formal legislation to remove broker compensation from the Medical Loss Ratio (MLR) rule. The existing rule also limits the ability of insurers to offer low-cost plan alternatives and, over time, they will reduce the number of insurers willing to write health insurance in the individual and small-group markets, leaving consumers underserved and causing countless insured individuals to lose their health coverage.

Please take a moment today to “Take Action” and send your representatives a message urging him/her to strongly consider cosponsoring H.R. 1206! Take Action NOW!

03.17.2011 News release by U.S. Rep, Mike Rogers

U.S. Rep. Mike Rogers, R-MI, and U.S. Rep. John Barrow, D-GA, have introduced a bipartisan bill that would amend the new health care law to preserve jobs and consumer access to licensed insurance agents and brokers.

“The nation’s 500,000 insurance agents and brokers help consumers find the right health care, advocate on their behalf, identify cost-savings opportunities and inform them of new products and changes in the industry,” said Rogers, a senior member of the House Energy and Commerce Committee Subcommittee on Health. “A mandate in the new health care law severely restricts their ability to perform such services, meaning small businesses are losing jobs or shutting down completely and consumers are finding it harder to access their services.”

The Medical Loss Ratio (MLR) regulation in the new law mandates how much insurers must spend on medical claims as opposed to administrative expenses. The new health law mandates that insurers must now spend up to 80 percent of revenue exclusively on medical claims.

The complication is how the Department of Health and Human Services (HHS) defines “administrative expenses.” Insurance agents and brokers are paid exclusively by commission, which as a convenience to consumers is included in the insurance premium, a “pass through” from insurers to agents and brokers. However, HHS classified commissions as an “administration expense” in the new health law.

Insurance agents’ and brokers’ commissions are never part of an insurer’s actual revenue, and should never be counted as an insurer administrative expense, as confirmed by the National Association of Insurance Commissioners, the non-partisan experts on state insurance markets.

The result has been insurers dramatically cutting commissions to agents and brokers, in some places up to 50 percent, resulting in jobs being cut, insurance agents and brokers are beginning to disappear and small businesses and consumers are experiencing more difficulty in accessing affordable insurance.

“Insurance agents and brokers serve as the voice of health insurance for millions of families and small businesses in rural communities,” said Congressman Barrow.? “These folks can help explain to consumers the many changes taking place in the healthcare world over the next few years, and so it’s important that our insurance agents are not hampered by provisions in the new healthcare law.?This is another critical improvement that needs to be made to the healthcare law, and I’m hopeful that my colleagues on both sides of the aisle will work with Mike and me to see that this important improvement is implemented.”


What goes around comes around!

Bob Laszewski does a good job of not only demonstrating that he understands politics but also has a sense of humor about it.

If you have been quick to judge the Obama administration for the way health care was passed or Wisconsin Governor Walker’s recent legislative tactic with the union issue, please read Bob’s post.  It’s not right or left just a good observation.

Why do specialists dominate our health care system?

American Medical Association’s Relative Value System Update Committee, RUC, is a panel of experts that guide the way providers are reimbursed, or at least for our federal programs like Medicare and Medicaid.  However, this private committee influences how of our health care system is designed. While you can likely get through your usual day not knowing what RUC is, however if you want to know why you spend more time at the specialist than you do your primary care physician or why there is so much talk is about re-focusing our health care system towards primary care the featured article will likely change your views or at least enlighten you.  A must read!

Read: Fixing America’s Health Care Reimbursement System by B. Klepper

Children under the age of 19

The new health care law does a wonderful thing for children under 19, it prevents insurance companies from denying coverage to children under the age of 19. The result, insurance companies have stop writing child only policies for children under 19.

As a result of the way children are defined in then new law an 18 year old who is legally emancipated from her parents cannot obtain health insurance.