H.R. 1206—the bill that would exempt insurance agents' commissions from the medical loss ratio calculation—could cost the federal government about $1.1 billion over the next decade, according to budget analysts at the Congressional Budget Office.
The CBO on Wednesday estimated that enacting the bill would increase the budget deficit by $531 million between 2013-2017 and by about $1.1 billion between 2013-2022.
The PPACA requires insurance companies to spend 80 percent or 85 percent of their premiums on health care costs, leaving only the remaining 15 percent or 20 percent for profit and administrative expenses. The difference then goes back to policyholders in rebates. The Department of Health and Human Services said the MLR rule saved consumers about $1 billion this year.
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