December 1, 2017




In This Issue
Fast Facts
NAHU Submits Comments on Payment Parameters Rule
CMS Releases Draft 2019 Letter to Issuers
HHS Nominee Offers Support for Revisiting the ACA’s Medical Loss Ratio Formula for Broker Commissions
State Legislators Adopt Balance-Billing and Air Ambulance Model Laws
Washington Update Podcast: Kicking off December with a Flurry of Legislation
Register Now for Next Week’s Compliance Corner Webinar: Understanding the Employer Shared Responsibility Payment Letter 226J
Gift Yourself Capitol Conference this Holiday Season
HUPAC Roundup
What We're Reading
E-mail the Editor
Visit the NAHU Website
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HHS Nominee Offers Support for Revisiting the ACA’s Medical Loss Ratio Formula for Broker Commissions
Alex Azar testified before the Senate Health, Education, Labor and Pensions Committee on Wednesday in a non-binding confirmation hearing on his nomination to be the next secretary of HHS. During the hearing, Senator Johnny Isakson (R-GA) brought up the bipartisan legislation to exclude broker commissions from the ACA’s medical loss ratio formula and asked Azar if he would be willing to work with them on a resolution, to which Azar was amenable. NAHU has long sought changes to the treatment of broker commissions in the MLR calculation, either by classifying broker commissions as a pass-through fee exempt from the MLR calculation or to adopt the December 2011 finding by the National Association of Insurance Commissioners to classify an appropriate portion of producer compensation as a healthcare-quality expense.

NAHU is working with Senators Isakson and Chris Coons (D-DE), along with Representatives Billy Long (R-MO) and Kurt Schrader (D-OR), to reintroduce legislation to treat broker commissions as a pass-through expense. This would mark the fourth iteration of the legislation and would be the first time that both the House and Senate versions would be true companion legislation in seeking relief in the individual and small-group markets. We expect to announce more information on this legislation in the coming weeks and will continue to press the Trump Administration for greater flexibility in interpreting the statute with regards to broker commission.

Other than the MLR question, Azar faced many questions on his priorities if he should be confirmed as HHS secretary. Given his previous experience as a pharmaceutical executive and six years at HHS as general counsel and deputy secretary in the George W. Bush Administration, he noted that his top priorities will be addressing rising drug prices, making healthcare more affordable and accessible, tackling the opioid epidemic, and facilitating Medicare innovation. Azar noted his support of the Alexander-Murray bipartisan market-stability legislation, but also said he was opposed to the ACA’s individual mandate for health insurance. Many of the other questions he faced dealt with Azar’s plans for addressing the opioid epidemic and lowering the cost of drugs. He said that insurers and pharmacy benefit managers share blame for rising costs, in addition to manufacturers.

The next step for Azar’s confirmation is for the Senate Finance Committee to hold a hearing and vote on his nomination prior to being considered by the full Senate, where he will need at least 51 votes for confirmation. Azar is not expected to face nearly the same level of opposition as his predecessor, Tom Price, who was narrowly confirmed 52-48 in February after the Finance Committee had to suspend the rules to advance his nomination. NAHU looks forward to working with Azar should he be confirmed, along with the many other Trump appointees and career staff at HHS with whom we have built relationships, some spanning decades of service to the government. We will continue these efforts to make regulatory changes to improve the law for agents, brokers, employers and individuals.

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