At an October 13 hearing, the House Education and the Workforce’s Health, Employment, Labor and Pensions Subcommittee examined the adverse impact the health reform law’s medical loss ratio (MLR) rules are having on both employers’ and individuals’ ability to select appropriate health insurance.

Witnesses included representatives from the professional insurance advisor coalition, health and tax policy research field, financial institutions, and consumers.  They told the committee that that professional insurance agents and brokers add considerable value to health insurance transactions, and that value should not be denied to consumers because of the health law’s MLR requirements. They also warned that insurance providers are having to leave the market because they cannot meet the health reform law’s MLR requirements.

Lawmakers questioning the witnesses expressed concern about the MLR rules setting a precedent of government involvement in internal business decisions, and noted that the National Association of Insurance Commissioners (NAIC) did not recommend inclusion of agent compensation in MLR calculations. While there was some disagreement about the current MLR rules’ impact on consumer access to agents and brokers, there was no disagreement that that access should remain available.

The witnesses also told lawmakers that the uncertainty arising from as yet-unreleased health reform law regulations is preventing new hiring. This is because, they said, in the absence of rules companies cannot determine the cost of health insurance and thus cannot calculate accurately the cost of new employees.