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The Big “I” expressed disappointment with the decision by the U.S. Supreme Court on the constitutionality of the Patient Protection and Affordable Care Act (PPACA).
“The Big ‘I’ is disappointed with the U.S. Supreme Court’s decision to uphold the PPACA,” says Robert Rusbuldt, Big “I” president & CEO. “Our association, economists and other industry leaders and experts agree that many of the provisions in the PPACA are causing more harm than good. The Big ‘I’ will continue to work with Congress to repeal provisions of the law that negatively impact our small business members and the customers they serve.”
Since the PPACA was upheld in its entirety, except for the narrowing of the Medicaid enforcement, implementation will move forward as scheduled. Importantly for agents, the detrimental medical loss ratio (MLR) provisions first implemented in 2011 are also still in effect. These provisions have led to cuts in compensation of up to 50% in some areas of the country.
“The PPACA’s MLR provisions threaten the livelihoods of health agents and brokers and establish perverse incentives that make it challenging for smaller insurers to enter the marketplace,” says Charles Symington, Big “I” senior vice president of government affairs. “These MLR requirements have produced cuts in agent compensation of up to 50% in some areas of the country and made it a challenge for many agents to maintain the level of customer service and quality of advocacy traditionally provided at a time when such assistance is needed more than ever.”
Click here to read the Court's opinion and here to read IIABA's talking points on what this ruling means for agents and brokers across the country.
Insurance Commissioner Dave Jones applauded the Court’s decision and reaffirmed his commitment to implementing the legislation in California.
“The passage of the Affordable Care Act is one of the most significant legislative achievements in the last forty years. The Court’s decision today is a critically important one for the future of the entire nation. The Affordable Care Act is especially important for California, which is home to over seven million uninsured people, one million of whom are children.
Jones also used the occasion to point out his desire to control rates.
"There is one reform missing from the Affordable Care Act. The missing piece of the Affordable Care Act is the absence of authority to reject excessive health insurance rate hikes,” said Jones. “We need to pass a law in California to give the Insurance Commissioner the authority to reject excessive health insurance rate increases. The State Senate should do this by passing Assembly Bill 52.”
Small Business California founder and IBA West member, Scott Hauge, President of CAL Insurance and Associates, Inc. wrote “I know many of you will disagree with me but I think it was a good decision and will help small businesses in the future,” in an email to his members Thursday where he asked them to reply with their reaction to the decision.
“This will allow the Exchange to move forward to reduce the cost of health insurance for small business and increase the options for small business. It will also be a great benefit for sole proprietors who now have to go through medical underwriting to get coverage,” added Hauge.
At mid-day, Hauge had 40 responses; 28 supported the decision and 12 opposed it.
“While the NAIC has taken no position on the law, as an organization we have continued our mission of providing information and support to state regulators so that they may best serve their consumers and their markets. We will continue to work to give regulators the tools they need to ensure a stable health insurance marketplace in the states. Where the ACA provides states with latitude, regulators will continue to work with insurers, consumer groups and the public to provide the best regulatory framework going forward.”
Click here for more information about the health care reform and state insurance regulation.