Rep Harry Waxman just doesn't understand

Energy and Commerce OKs broker bill

By: Jason Millman – Politico

Posted: September 20, 2012

In the end, Rep. John Barrow found himself all out on his own.

Barrow (D-Ga.), the co-sponsor of a bill shielding agent and broker commissions from the health care law’s medical loss ratio requirement, was the only Democrat on the House Energy and Commerce Committee who voted to advance the bill Thursday. The committee approved the bill on a 26-14 vote.

But it’s likely to have much more Democratic support if it gets to the full House floor.

The agent and broker groups say their livelihoods are threatened by the ACA’s limits on what insurers can spend using premium dollars, besides the actual cost of medical care. By lumping in broker commissions with insurers’ administrative spending, the groups say their members have seen their revenue cut between 20 and 50 percent and have suffered job losses as a direct result.

“This doesn’t just hurt the brokers, but also their employees and, most importantly, the consumers who rely on them to obtain coverage and assistance in understanding the complex health care law,” said Robert Smith, president of the National Association of Insurance and Financial Advisors, in a statement.

Agent and broker groups, framing the MLR as a jobs issue, have made the bill a top legislative priority over the past two years. They quickly gained support in the House with 220 co-sponsors, including about two dozen Democrats — more than most bills altering ACA provisions.

“This should be a bipartisan bill,” said Rep. Mike Rogers (R-Mich.), who co-sponsored the legislation with Barrow.

But the strongest supporters of the ACA have pushed back hard against the bill, contending it would weaken one of the law’s strongest consumer protections. The $1.1 billion in MLR rebates sent out by insurers this year could have been cut by more than half if agent and broker commissions were exempted from the rule, Consumers Union claimed in a report yesterday.

“Commissions have always been recognized as part of administrative costs,” said Henry Waxman (D-Calif.), the committee’s top Democrat.

“This bill would reverse this, causing consumers to pay more for coverage or get less in benefits.”

Democrats on the committee also criticized a provision of the bill that would let states determine whether enforcing the MLR would destabilize their individual or small-group insurance markets.