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OIR, Commissioner McCarty Respond to Healthcare Reforms

OIR, Commissioner McCarty Respond to Healthcare Reforms

The Office of Insurance Regulation recently announced that Florida Insurance Commissioner Kevin McCarty joined regulators from other states in voting to approve the NAIC’s recommended language for the Medical Loss Ratio (MLR) definition under the federal Affordable Care Act.  Due to the definition of medical expenses, health insurance agent premiums were not included in the definition of medical losses. Commissioner McCarty has expressed concern that an immediate adoption of the MLR ratios without accommodating the needs of health insurance agents will negatively impact the selection process for health insurance in the small group and individual markets.

 Commissioner McCarty co-sponsored a resolution that was adopted by the NAIC demonstrating the NAIC’s commitment to keeping agents as an integral part of the health insurance selection process for small businesses and individuals.  In addition, Florida also sponsored a charge adopted by the Health Insurance and Managed Care (B) Committee, instructing the NAIC to continue to work on other methods, possibly through a model law or statute, that will retain the role of health insurance agents within the framework of the federal law, and within the framework of the MLR definition.

These recent activities reflect a continuing effort by the Office of Insurance Regulation to stay in front of regulatory changes prompted by federal healthcare legislation.  In May 2010, the Office along with the Florida Health Insurance Advisory Board, conducted a public hearing in Orlando on the MLR issue. The OIR has scheduled another hearing on the MLR issue in Tallahassee for September 24. The Office intends to take information from this hearing to develop proposed legislation that preserves the role of health insurance agents in Florida.

The NAIC is in the process of writing a letter to the Secretary of Health and Human Services (HHS) recommending a three-year transition period for implementing the MLR standards under the federal law to minimize disruption in the marketplace.  Commissioner McCarty has expressed his support for this transition period.  According to the OIR, a transition period may also give the NAIC and HHS (and the state of Florida) time to adequately resolve the health insurance agent issue prior to full implementation of the MLR standards.