While the Affordable Care Act’s (ACA) medical loss ratio (MLR) and rate review provisions have been getting most of the media attention, a new coalition of business organizations has come together to draw attention to another important requirement of the ACA. Calling themselves Stop the HIT on Small Business, more than 25 national business organizations have joined forces to work toward repeal of new taxes the ACA would impose on private health insurance starting in 2014. Business leaders behind the effort say that small business owners, their employees and the self-employed will ultimately bear the brunt of $87 billion in additional health care costs in the first 10 years as a result of the new taxes. The group is planning Capitol Hill outreaches and grassroots efforts.
Support is growing in Congress (over 80 co-sponsors) for Mike Rogers’ (R-MI) and John Barrows’ (D-GA) legislation that would exclude agent commissions from the MLR calculation. Currently, commissions count as administrative expenses in calculating insurers’ MLRs. This support was highlighted in a House hearing last week before the Health Subcommittee of the Energy & Commerce Committee, where the larger issue of the MLR burden was front and center. Witnesses representing agents and brokers, insurers and academia all testified against the unintended, negative consequences of the MLR requirement, with agents and brokers in particular noting the direct financial impact to small business and individual agents and their families. The Rogers/Barrows bill would simply not factor commissions into the MLR calculation. The day before the hearing, Congressman Tom Price ((R-GA) introduced an even more aggressive bill, as his proposal would repeal outright the MLR provision of ACA. While it is unlikely that either bill will get traction in the Senate on its own, bipartisan support for the agents and genuine concern about unintended consequences puts this issue in play as part of any potential mega-deal on the budget/deficit/debt ceiling issue over the next few months. The Senate was not in Session last week; and the House is out this week.