The Affordable Care Act as we have come to know it is going to change significantly.
Even Democrats agree that President Barack Obama’s signature accomplishment is going under the knife. Sweeping Republican victories at the November ballot box — led by Donald J. Trump winning the presidency — ensured that much.
The question now is, what will survive, what will disappear forever and what will be changed when the new health care bill comes out of the sausage grinder?
Health insurance agents plagued by dwindling commissions would emerge as winners if the future “replace” bill eliminates the medical loss ratio (MLR), said Marcy Buckner, vice president of government affairs for the National Association of Health Underwriters.
“We do think that with the medical loss ratio provisions implemented on the carriers, it has resulted in higher premiums,” she explained. “So if those restrictions can be taken off the carriers, it could help ease some of the burdens that carriers are feeling on the premium side.”
Under the ACA’s medical loss ratio, health payers are required to spend a minimum of 80 percent of their premium revenue on paying claims and boosting quality, while the rest can be spent on administrative fees, marketing and profits.
Health insurance companies have claimed they have trouble meeting the calculations of the MLR due to treating fraud prevention and recovery differently.
Previously, NAHU had supported a tweak to the MLR, removing agent and broker commissions from the administrative pool of dollars. With momentum for changes to the ACA at an apex, NAHU is now asking legislators for full repeal of the MLR, Buckner said.
Full repeal is something that Dr. Tom Price, Trump’s choice to lead the Department of Health and Human Services, supported as a congressman, she noted.
Working to Replace
As of this writing, GOP leaders were eagerly moving to repeal the ACA outright. Any effort to dismantle and replace the health care measure is threatened by a Democratic filibuster in the Senate. Overcoming a filibuster requires at least 60 votes — and Republicans have only 52 Senate votes in the new Congress.
That means Republicans might have to rely on the budget reconciliation process. Reconciliation calls for a simple Senate majority to pass measures related to federal revenues and spending, as long as those measures are budget-neutral, meaning they neither increase nor decrease overall spending or revenues.
Democrats originally passed much of the ACA in 2010 using reconciliation. The question for the Senate parliamentarian is whether full repeal of the MLR qualifies as part of budget reconciliation, Buckner said.
In case the legislative route is untenable, NAHU is pursuing a parallel strategy to try to get rid of the MLR through regulatory changes.
“It’s definitely something we’re not letting go of in terms of using all of the avenues possible,” Buckner added.
Other ACA items unrelated to the budget — insurance market reforms, for one — will require Republicans and Democrats to work together to achieve 60 votes. The expectation is that a full replacement measure will be tackled in pieces that could take the entire 115th Congress to complete.
“There’s always the danger that if you separate legislation too much, as you go to the next piece of legislation to try and pass that, it could be compromised down to not being able to work with the other pieces,” Buckner said. “We’re hoping for thoughtful consideration as to how all these pieces are put together.”
‘Taking Our Industry Back’
Health Agents For America also supports repeal of the MLR. But the organization has a long list of goals for the new health care reform measure, said President and CEO Ronnell Nolan.
The overarching theme is ensuring long-term viability for agents and brokers to serve consumers, she said.
“Our motto for 2017 is taking our industry back,” she added. “I describe it as the door being open, and it’s our opportunity to walk through the door and sit at the table. There are a lot of people who should be at the table who were not during the original legislation.”
There are many tweaks and changes that can be made to improve the business of selling health insurance, Nolan said. A significant goal is reforming the essential health benefits clause.
The ACA requires non-grandfathered health plans in the individual and small group markets to cover essential health benefits in 10 benefit categories, which include things like ambulatory patient services and prescription drugs.
But the list also includes “maternity and newborn care,” things a 65-year-old couple has no need for, Nolan explained.
“That is something that has increased rates unnecessarily,” she said. “The private market needs to create plans that the people want to purchase.”
In addition, the HAFA checklist of health care reform goals includes:
» Eliminate health care “navigators.” Created by the ACA, these government counselors duplicated the work meant to be done by agents, Nolan said, adding, “We’d love to see those defunded.”
» Reform the pre-existing conditions clause. A popular aspect of the ACA is the guarantee of coverage for people with pre-existing health problems. While it’s a good concept, Nolan said, “there has to be something to tweak the market so people aren’t getting on when they’re sick and getting off when they’re well.”
» Expand the 3:1 ratio. The 3:1 ratio stipulates that premium rates must not vary by more than 3:1 for like individuals of different ages who are 21 years old and older. For example, if a 21-year-old woman is charged a $200 monthly premium, then a 65-year-old woman cannot be charged more than $600.
The ratio needs to be expanded “to maybe 5:1,” Nolan said.
» Drop the plan to permit insurance sales across state lines. This was one of Trump’s campaign themes to make health insurance more affordable. But it doesn’t work, Nolan said. “We can’t figure out how anybody on Capitol Hill thinks that is going to save anyone money,” she said.
HAFA produced a white paper it plans to take to Capitol Hill to make sure agents’ voices are heard as health care reform is being crafted, Nolan said. The good news, she added, is it seems Republicans “are not going to tell insurance companies how to run their businesses.
“We’ve got to figure out a way to gain a competitive edge for insurance companies,” Nolan added. “If something is not done over the next few years, there’s not going to be room for an agent. And it’s the consumer who is going to lose.”