Thursday, January 20, 2011

Will business lobbies save the PPACA?

I take some cheer from National Underwriter's report on the worries of insurance producers (agents and brokers):
Congressional affairs experts at some producer groups are wondering whether Republicans hate the Affordable Care Act so much that they will avoid making serious efforts to fix obvious problems. 
One problem that's very obvious to producers is that their fees are the first sacrifice to the PPACA's requirement that insurers spend a higher percentage of premium dollars on health care:
The issue getting the most attention from producer groups is PPACA medical loss ratio (MLR) provisions that will require health insurers and health plans to spend 85% of large group premium revenue and 80% of individual and small group premium revenue on health care or quality improvement efforts.

NAHU says the MLR provision, which took effect, Jan. 1, is particularly unworkable.
Health insurance agents and brokers say their commissions have been cut 50% starting this year because the MLR formula classifies commissions as an administrative expense.

Producers argue that the formula should exclude commissions, because customers pay the commissions, and health insurers collect commission payments merely as a convenience to the customers.
I find this heartening not because I want to see agents lose their livings, but because I want to see Republicans start acting like Republicans and get to work bargaining to protect their oldest constituents, various business interests. That's what insurance producers want:

Many producers concede that repealing the Affordable Care Act might be impossible but would like to see Congress change specific provisions, such as the MLR provision....

Diane Boyle, a vice president at the National Association of Insurance and Financial Advisors (NAIFA), Falls Church, Va., says House passage of H.R. 2 [the repeal bill] was expected.

“We are eager to work with Congress in a bipartisan effort to address targeted provisions to improve affordability and sustainability of private insurance choices, and to ensure consumers have access to professional services provided by licensed and regulated insurance agents,” Boyle says.

In other words, cut the theatrics; let's get down to business.

Repeal is not going to happen, except perhaps through the Supreme Court.  The real legislative danger to the PPACA is defunding -- Republicans choking the budgets of agencies that have to build new institutions and write and enforce new regulations.  What leverage do Democrats have against that, other than gridlock? The desire of Republicans to serve myriad interests like those of the producers -- some of which will have a valid point about a provision particularly onerous to them.

Whittling away at tough, important regulations like the medical loss ratio requirements is one danger to effective healthcare reform. But Democrats can, I imagine, trade some concessions for some give on funding.  If business lobbies can induce Republicans to stop playing and start dealing with Democrats, that may be a path to preserving -- if incrementally weakening here and there -- the PPACA.

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