A bipartisan bill that would separate broker compensation from the medical loss ratio under the Patient Protection and Affordable Care Act is earning praise from brokers and agents who have argued that the law's provision is threatening their livelihood.
The Access to Professional Health Insurance Advisors Act — H.R. 2328 — introduced Wednesday by Reps. Mike Rogers, R-Mich., and John Barrow, D-Ga., would clarify that broker compensation is not part of the medical loss ratio calculation as mandated by PPACA.
The PPACA requires insurance companies to spend 80 percent or 85 percent of their premiums on health care costs, leaving only the remaining 15 percent or 20 percent for profit and administrative expenses. To comply with the law, insurers have to cut back on commissions — making it impossible for many brokers to continue the way they do business as they did.
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