Insurance Commissioners Back Away From Broker Bill
This post was updated at 5:47 p.m.
Brokers hoping that the nation鈥檚 top insurance regulators would endorse a controversial bill now pending in聽Congress had their hopes dimmed Tuesday.
鈥淲e鈥檙e looking for solutions other than changing federal law,鈥 said Kevin McCarty, Florida鈥檚 insurance commissioner.

Late last month, a McCarty-headed committee of the National Association of Insurance Commissioners endorsing the bill sponsored by ,聽R-Mich., which would remove sales agent fees from the administrative costs insurers must report under a provision in the 2010 federal health law. 聽The committee sent along its recommendation and a report to the NAIC鈥檚 executive plenary.
But when the executive committee of the NAIC met by phone Tuesday afternoon for what could have been a contentious debate over whether to endorse the bill, McCarty said he would not call for a vote, but instead said continuing聽“discussions with HHS to see if we can find a solution that addresses the issue”聽would be the best course at the moment.
Proponents of the Rogers bill say it would help protect sales agents jobs 鈥 and, with it, their ability to help consumers in the complicated task of buying health insurance. 聽They point to anecdotal evidence that some insurers are already cutting agents sales commissions in order to meet spending requirements of the health care overhaul law.
The Rogers bill would make it easier for insurers to meet the federal requirement that they spend at least 80 percent of revenue on medical care, leaving 20 percent for other costs, such as sales and marketing,聽profits and executive compensation. 聽Insurers that don鈥檛 meet that聽spending target, known as the 鈥渕edical loss ratio鈥 聽must issue rebates to consumers.聽 The Obama administration the MLR provisions may result in as many as 9 million people being eligible for rebates totaling $1.4 billion.
Last year, the NAIC recommended to federal officials that broker fees be included in the medical loss ratio. That recommendation was accepted. 聽To remove broker fees from the calculation would take congressional action.
McCarty鈥檚 office issued a statement after the meeting saying the call was an update and that no vote had been scheduled. McCarty, it said, continues to 鈥渟upport the underlying purpose of the Rogers鈥 bill, which is to maintain the role of agents, and fair compensation for health insurance agents.鈥
Janet Trautwein, who heads National Association of Health Underwriters, says agents and brokers would like the NAIC endorsement of the Rogers bill and have not given up hope.
Speaking of McCarty, Trautwein said, 鈥淲hat some people thought he meant was that [the NAIC] was done and finished鈥 with its discussion of the possible endorsement. 聽鈥淭hat was not our understanding at all.鈥
Consumer groups, which oppose the Rogers bill, say agents’ fees are clearly administrative costs and should be .
Tuesday鈥檚 action pleased Ethan Rome, executive director of the left-leaning Health Care for America Now, an advocacy group in Washington D.C.
鈥淚t sends a clear message to Congress, which is that this is too divisive of an issue,鈥 said Rome. 鈥淯nder current law, consumers and small businesses are going to see billions in rebates, which, if the Rogers bill is passed, would be taken away.鈥