Impact of MLR on Consumers, Agents

NAIFA has released a white paper, No Premium on Value: The Health Care Law’s Medical Loss Ratio Brings Dangerous Consequences for Consumers and the Agents Who Serve Them, which explores unintended consequences of a Department of Health and Human Services rule that requires health insurance companies to spend 80 to 85 percent of their income from premiums on medical expenses and quality improvements.

The paper features first-hand accounts by health insurance brokers of how the MLR rule has damaged their businesses, reduced their ability to provide customer service, and harmed consumers.  For example, more than one in 10 agents surveyed say they have stopped selling and servicing health care policies for individuals, and nearly 30 percent foresee having to do so.

Among the brokers profiled in the white paper is Ed Anderson of Edina, Mo., who said, “I cannot imagine what the damage of the MLR has been to agents nationwide. We’ve lost valuable people because of this.”

In addition to interviews with brokers, the white paper cites academic research, government reports and industry studies as evidence of the devastating impact of the MLR. The paper concludes with a recommendation for HHS to reconsider the harmful rule and support for congressional action to provide a remedy.