MLR Update: Agent Commissions Just a "Pass-through" Charge

jbage007

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so it should be excluded from MLR.

Got this urgent "contact your Ins. Comm. today" memo from NAHU. It's the first time I have seen commissions referred to as a mere "pass-through" item. In fact, I had to re-read the memo 2 or 3 times to figure out what they were talking about.

Excerpts:

NAHU staff has been very engaged with NAIC meetings and deliberations on this all important topic of MLR definitions, and pressing our views on how MLRs will affect access to agent/broker services, insurance access and affordability, as well as solvency regulation.

But we need all of your help today to contact your state insurance commissioner and urge that they not include fully-disclosed pass-through fees collected by carriers in MLR calculations, and that they not yield to outside pressures to somehow include certain federal taxes (expenses beyond the control of insurance carriers) in the MLR calculations in contravention of the specific statutory language of the Patient Protection and Affordable Care Act (PPACA).

Carriers today routinely collect funds that are passed-through to agents as an operational convenience to their members. Particularly in the small business and individual market, health plans include commissions in their premiums, but pass 100% of these funds along to agents.
:skeptical:

It would be counterproductive and harmful to broader health insurance reform efforts for the MLR provisions to eliminate this sort of cost-saving administrative conveniences which carriers provide to their members.
 
Most references I see on the internet about "Pass-Through Charges" are in regards to Title Insurance. But the fact that President Obama suddenly decided not to meet with the NAIC today (8/17/2010) isn't good.

I don't know that it's such a bad thing. It could be Obama doesn't want to face the stark reality of getting clobbered over the head by tons of questions from a well-informed industry group letting him know in no uncertain terms just how absolutely unworkable his stinkin' reform stuff really is.

Just sayin'
 
If Obama showed up, someone should ask him why no one is insuring children any more? It's all about the kids isn't it?
Democrats will use this as one of the reasons to push for a public option....which was their true Goal to begin with.

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I really don't understand this logic. What the heck makes onoe thing a 'pass-thru' charge and another thing not.

Let's see, we have to hire janitors to clean our building. We collect a bit of every premium to pay for this service. This is a pass thru charge. Same logic applies to almost anything.

Now, if you put it specifically on agents commissions, then the carrier can contort that logic to say policies sold 'in-house' don't have this pass thru charge and can therefore be sold for less than the same policy where we have to send out some money to the agent. After all, it's not our money, we are simply collecting it for the agent.

This is a bad case of be careful what you wish for!!!!!

Dan
 
Who cares if it is pass-through or not. You are not going to get a 20% commission on a GI policy when everyone is paying 1000+/mo. The uproar alone would kill it. No one is going to thank you for making 2400 off of selling someone a health insurance policy that will put them in the poor house.
 

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