Mlr

[ABC]

Liberal groups push back against last-minute insurance lobbying on medical-loss ratio - The Hill's Healthwatch

Aggregate medical spending across state lines, which would allow them to spend less than the minimal ratio in some areas as long as it's made up elsewhere;
Adjust for annual fluctuations in healthcare spending; and
Count expenses such as broker commissions, fraud prevention and claims handling as medical rather than administrative costs.

These 3 bullet points are big.

 

[chp]

Been away for a while, and hoping someone can explain the MLR process a bit.

Does the NAIC vote today on what goes into the MLR, as in should commissions be counted or not? When will we know what the vote is, and what happens after that? Does it go to HHS, where they can agree, or do they have the power to do whatever they want?

My biggest question is the timeline for knowing when we know the final outcome.

If commissions are exempt from the MLR, is it fair to say our current commission structure will stay the same?

When do you think we will know the final outcome about commissions?

Thanks..

 

[ABC]

I really can't answer all of your questions and the ones I think I have answer for might be wrong.

HHS appointed NAIC to draft the MLR. I think the GOV is going to go with NAIC recommendations. The NAIC has spent a lot of time developing the MLR and in Nov. we are going to see about 100 new state insurance commissioners.

This MLR is suppose to go into effect Jan. 1 2011. As you know many state commissioners are already asking to be exempt for at least one year. I think our comp is going to squeezed one way or the other. Even if the Gov. keeps us in the game the carriers will take advantage.

I think we should have clarity on this by December.

The MLR is the biggest hurdle we face right now as an industry.

Been away for a while, and hoping someone can explain the MLR process a bit.

Does the NAIC vote today on what goes into the MLR, as in should commissions be counted or not? When will we know what the vote is, and what happens after that? Does it go to HHS, where they can agree, or do they have the power to do whatever they want?

My biggest question is the timeline for knowing when we know the final outcome.

If commissions are exempt from the MLR, is it fair to say our current commission structure will stay the same?

When do you think we will know the final outcome about commissions?

Thanks..

 

[Crabcake Johnny]

"The commissioners did approve a motion to appoint a subgroup to work with HHS on how to deal with issues related to broker and agent compensation. This compensation is currently categorized as an administrative expense; agent trade groups have pushed for their fees to be taken out of the calculation altogether. Brokers are nervous that their role will be greatly diminished if their fees are categorized as administrative spending."

Read more: State health officials approve key reform plan - Sarah Kliff and Jennifer Haberkorn - POLITICO.com

 

[chp]

so, commissions are not going to be taken out of the MLR....wonder when we will know what the carriers will be able to offer us for commissions.

 

[Crabcake Johnny]

Right. Slightly confusing but agent commissions are recommended to be a part of the MRL calculations and certainly HHS will adopt the recommendation.

That a subgroup will work with HHS on issues related to compensation seem to be neither here nor there. That commissions are a part of MLR calculations means reduced comp.

 

[djs]

In or out, reduced comp was on its way. It might be slightly more reduced if its in the MLR, but it would have been reduced either way.

Why? The mandate makes it a pure commodity sale, less need for the agent to actually sell. Guaranteed issue means its basically printing money once you have a prospect. Granted, neither of these are in play just yet, but they are very close (in a carriers sense of the word).

Personally, I would look at the Medicare Advantage plan commission structure as the way forward. It's less (significantly less) then you get now for an IFP, but overall volume should be higher and easier. I have no inside info on this, just assume carriers will want to move to a more fixed cost type of approach.

Dan

 

[Crabcake Johnny]

I think many carriers are going to move to a low comp/bonus structure that only rewards high producing agents.

 

[CHUMPS FROM OXFORD]

5% commission
Possible 10% bonus to brokers with 100-200 inforce plans with that carrier.
Possible 5% bonus to brokers with 50-99 inforce plans with that carrier.
Possible 2.5% bonus to brokers with 25-49 inforce plans with that carrier.

 

[VolAgent]

HHS appointed NAIC to draft the MLR. I think the GOV is going to go with NAIC recommendations. The NAIC has spent a lot of time developing the MLR and in Nov. we are going to see about 100 new state insurance commissioners.

Umm, you know something I don't. Exactly how are we going to get 100 new state insurance commissioners, and how does November have anything to do with it?