Washington lobbyists will tell you that insurance agents are among the most powerful forces in American politics, since they come close to having an office on every corner.  That influence is in evidence with the support that is gathering for the "Access to Professional Health Insurance Advisors Act" (H.R. 1206) that was approved Sept. 20 by the House Energy and Commerce Committee by a vote of 26-14.  The bill was introduced by Reps. Mike Rogers (R-Mich.) and John Barrow (D-Ga.).

The bill has 220 bipartisan sponsors in the House, and similar legislation has been introduced in the Senate by Sens. Mary Landrieu (D-La.), Johnny Isakson (R-Ga.), and Ben Nelson (D-Neb.).  No action has yet been scheduled on the bill there though, and the Obama administration is not likely to favor the bill.

H.R. 1206 would exclude brokerage commissions from the calculation of the medical loss ratio (MLR).  Under the Affordable Care Act, large group insurance plans must spend at least 85 percent of premiums on medical claims and quality improvements, and individual and small group plans must spend at least 80 percent.  Plans that do not meet those thresholds must refund the difference to policyholders.  Since brokerage commissions are administrative expenses, insurers have been cutting commissions to meet the MLR.

The impact of the MLR on health insurance brokers, who probably will be needed to work with individuals and small businesses as the health insurance exchanges are implemented under the health care reform law, has been severe.  In a survey released last May, the National Association of Insurance and Financial Advisors found that 70 percent of brokers surveyed had experienced decreased commissions since the provision was implemented in 2011.

But removing brokerage commissions would also severely impact the MLR, consumer and patient groups argue.  Consumers Union issued a report Sept. 19 finding that the bill would have cut rebates to consumers from $1.1 billion to as little as $378.8 million based on 2011 MLR estimates.