BenefitMall’s Michael Gomes Testifies in Austin TX
As BenefitMall continues to work closely at both the local and national Congressional level we wanted to inform you that today, Tuesday, March 1, Michael Gomes, Executive Vice President for BenefitMall, will testify in Austin, TX before a committee regarding Representative John Zerwas’ (R-TX) legislation, section CSHB 636. While brokers are not mentioned in this particular piece of legislation, we want to reiterate the importance of the broker role in the distribution and servicing of health insurance. We feel that the bill must specifically identify the importance of brokers in the support of their position.
Leading up to this testimony, BenefitMall’s President and CEO, Bernard DiFiore, recently participated in an invitation-only committee conference with NAIC. With respect to broker commissions, BenefitMall knows that NAIC is working on the issue and that during the call, NAIC said that they would study language to recommend that the brokers’ role and their commissions would be protected. We strongly are in favor of this position and further emphasize that commissions should be treated similar to taxes and should be a part of an insured’s premium, but be dealt with outside the Medical Loss Ratio calculation.
Michael Gomes’ Testimony
In support of Rep. Zerwas’ legislation, CSHB 636, BenefitMall would like to share with you some general comments about health insurance exchanges and the committee substitute addressed by Mr. Gomes before the committee.
BenefitMall believes that privately-funded and operated health insurance exchanges, which have been in successful operation for years, should co-exist with the public exchanges. For that to occur, there are several guiding principles we encouraged members of this committee to consider when passing legislation to create this exchange.
It is important that the legislature clearly define the purpose and goal of an exchange. The connector cannot be all things to all people, but it should perform several basic functions, including certifying health plans to ensure they meet minimum benefits standards, assisting employers and individuals with purchasing and enrolling in certified plans, utilizing quality assurance measurements, and providing assistance for eligible individuals and small businesses in accessing premium subsidies.
However, we believe it is important to keep in mind that there are more than 100 private health insurance exchanges in existence today that cumulatively represent more than one third of most insurance carriers’ distribution efforts. There is a role for a public exchange to play, but it should not serve to crowd out private exchanges that already exist in the market. We stress the importance that nothing be included in this legislation that would require individuals and small groups to purchase their insurance through a government-administered exchange.
So how can public and private exchanges work together to maintain the right balance? Private exchanges need to co-exist with public exchanges to ensure a “healthy” and effective health insurance system. Both private and public exchanges working collaboratively will:
- Aid in the expansion of coverage for the uninsured
- Ensure public exchanges will not bear the burden of high-risk populations alone
- Protect consumers’ right of choice
- Ensure a seamless transition for consumers from one coverage arrangement to the next
- Promote informed decision-making through the services of a broker and online resources
Private exchanges also can accomplish most of the public exchange functions described in PPACA, either through their own systems and/or in collaboration with the public exchanges. The goal of the establishment of the public exchange should be consistent with the establishment of the greatest and most vibrant outside marketplace, and contain as few restrictions on that private marketplace as possible. One of the ways this could be accomplished is to focus the public exchange on the uninsured or subsidized population, while allowing the private market to continue serving those who currently have insurance or who are not eligible for government subsidies.
There are some policy details in this bill that we have questions and comments about, but we believe this legislation represents a solid first step in the process of establishing a connector.
As more information becomes available, BenefitMall is committed to keeping you up-to date in a timely manner. Visit www.BenefitMall.com to view past Legislative Alerts in the “Newsroom” section. Or, you may visit www.HealthcareExchange.com for blog posts, polls, surveys and numerous resources. If you have any questions, please contact your local BenefitMall Sales Team and they will be happy to assist you. Thank you for taking the time to read through this important notification.
The views expressed in this legislative alert do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.