Welcome to Consumer Reports Advocacy

For 85 years CR has worked for laws and policies that put consumers first. Learn more about CR’s work with policymakers, companies, and consumers to help build a fair and just marketplace at TrustCR.org

NAIC plan would gut important consumer protection

Friday, November 4, 2011
Contact: Michael McCauley: 415-902-9537 (cell) or 415-431-6747, ext 126

NAIC Proposal Guts Important Consumer Protection
and Decreases Value in Health Insurance

WASHINGTON, D.C. — Consumers Union strongly opposes the National Association of Insurance Commissioner’s (NAIC) surprise decision to consider a proposal to weaken the medical loss ratio rule by removing broker commissions from the calculation.
The last-minute announced resolution urging Congress and HHS to take agents and brokers out of the medical loss ratio (MLR) equation is being circulated at the NAIC meeting in Washington and could come to a vote this weekend.
“This would be a big loss for consumers” said NAIC consumer representative and Consumers Union senior policy analyst Lynn Quincy. “The NAIC’s own figures estimate health insurance customers would miss out on over $1 billion in rebates.”
Last June, when the NAIC took up a similar recommendation, more than 10,000 consumers wrote to their insurance commissioner expressing disappointment and opposing the effort.
The MLR rule, designed to rein in health insurance premiums, is already working. Earlier this year, Aetna announced that it would reduce premiums for Connecticut policy holders by 10% on average, citing the MLR rule.
Complaints that the rule is forcing brokers and agents out of business are simply not substantiated by the facts. According to the NAIC’s own study, states that already have high MLR requirements have reported no impact on the availability of agents or brokers.
“Rising insurance premiums are one of the most frequent complaints we receive from consumers” added Quincy. “This proposal would effectively end the MLR as a tool for driving efficiency among insurers and bringing costs down for consumers.”