Florida insurance regulator asks life and health agents for help

Jan 4, 2012

The following article was published in The Florida Current on January 4, 2012:

State insurance regulator asks life and health agents for help

By Christine Jordan Sexton

Florida Insurance Commissioner Kevin McCarty has asked insurance agents to help him convince the U.S. Department of Health and Human Services that the federal health care overhaul is a job killer.

McCarty is fighting a December decision by the federal government to mandate that Florida health insurers follow strict medical loss ratios that specify the amount of money that must be spent on direct patient care.

The commissioner wanted to phase in the tough 80 percent requirement but federal officials turned down his request.

At the behest of the Office of Insurance Regulation the Florida Association of Health Underwriters emailed its members Dec. 23 asking them to share recent experiences as medical loss ratio requirements kick in and their commissions are reduced.

McCarty will send the notarized statements to the HHS no later than Friday.

They will underscore McCarty’s argument in a Dec. 30 letter appealing the federal government decision to deny the waiver request. 

“Agents are small business owners that have a connection to their clients that issuers often do not have,” McCarty wrote to Deputy Administrator and Director Steve Larsen, who wrote a stern 16-page letter. “Agents not only provide valuable information to consumers when purchasing the initial products, but following purchase, they assist consumers in gaining pre-certifications for different procedures, find ways for the consumers to save money, and help consumers gain access to the best facilities and doctors.”

The federal government has until Jan. 20 to respond to the state’s request for reconsideration. 

FAHU state legislative chair and Tallahassee agent Ken Stevenson said the OIR asked the association to contact its members and he emailed about 500 agents two days before Christmas asking agents to share their experiences since health reform has passed.

Stevenson said he has about half a dozen certified letters he shared with the OIR and more are coming in. 

The” gist of it,” Stevenson said, is agents lost contracts with insurance carriers who are realigning business strategies to meet the requirements. Agents who did sell policies earned less money because commissions were reduced.

“Two full-time employees were fired from a firm in Tampa,” Stevenson said, reading one of the replies to the OIR information request.“That was a pretty common theme.”

Florida requested that the medical loss ratio be gradually phased in during the next three years. Specifically, the OIR requested the MLR requirements be set at 68 percent, 72 percent and 76 percent  in 2011, 2012 and 2013 respectively.

The Affordable Care Act requires insurance companies to spend between 80 and 85 percent of premium on care. Companies that don’t meet that goal will have to provide rebates beginning this year.

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