As Senate Majority Leader Harry Reid (D.-Nev.) and Speaker of the House Nancy Pelosi (D.-Calif.) look to blend their versions of health care reform, the National Association of Insurance Commissioners (NAIC) is offering input.

In a letter to Reid and Pelosi, NAIC enumerated multiple concerns with the legislation. Foremost among these was a provision in the House bill to create a new federal regulator to oversee the health care exchanges created to cover uninsured Americans.

“We oppose the creation of a new federal Health Choices Commissioner and Health Choices Administration with authority to enforce provisions of this act in states whose laws meet federal minimum standards,” the letter states. “This dual regulation is likely to create unnecessary cost and confusion and produce no added value. We urge Congress to take advantage of state expertise, experience and resources in implementing this legislation by ensuring that states retain primary responsibility for regulating the business of insurance and that health insurance Exchanges be established and administered at the state level with the flexibility to meet the needs of our local markets and consumers.”

The letter also raised the issuer of medical loss ratio, stating that the mandates may conflict with existing agreements insurers have with producers.

“We are concerned that a loss ratio of 80% in the individual market may not be readily achievable by many insurers,” the letter states. “These companies have already entered into contracts with agents and brokers that obligate them to pay specified levels of commissions, and have expenses associated with underwriting and marketing that they will not be able to reduce until guaranteed issue requirements and health insurance Exchanges are implemented.”



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