The rules about health insurance exchanges are dynamic and evolving all the time. Some agents fear that these exchanges will displace us – the way Travelocity has caused the displacement of many travel agents. Others argue that since health insurance is a more sophisticated purchase than an airline ticket, and because consumers are likely to be confused by these new channels, our experience and advice will be even more important.
We hope the role of agents will become clearer over time. Meanwhile, here is an overview of what we do and what we don't know about health insurance exchanges.
Health Insurance Exchange: Definition
Health insurance exchange is an online marketplace where individuals and small businesses can shop, compare and buy health insurance. Think of it as Expedia or Travelocity health insurance. Nobody is required to use the exchange. It is an additional channel added to the market.
Some states, including Colorado, which is based in the Alliance Insurance Group, are taking an initiative to build their own stock exchanges, which are permitted by federal law but subject to some guidelines. Countries that choose not to create their own exchanges by 2014 will be required to use federal exchanges.
Countries that build their own exchanges often cite the desire to control their own destiny and allocate their exchange to the needs of the local population. Countries that rejected the exchange proposals often mention reluctance to support any aspect of the federal reform bill, which they hope the Supreme Court will annul.
In general, insurance exchanges allow consumers and small businesses to:
- Shop and compare health plans, which should include some standard benefits.
- Determine eligibility to obtain insurance premium exemption in the form of tax credits.
- Call or sit down with someone who can help explain the many benefits and feature plans.
- Register for the plan.
Below are some of the more relevant aspects of the health insurance exchanges for independent insurance agents.
Consumer access to agents
The National Association of Health Insurance Undertaker (NAHU) is pushing to include the option to contact the agent in online exchange systems. This can be structured similarly to the national web-based portal for home sales, which displays listing information in a unified format, but also links prospective homebuyers with a state-licensed real estate broker.
The importance of martyrdom
NAHU also believes that all agents involved in stock exchanges should be required to pass an annual test covering private coverage, public assistance and eligible support options to ensure familiarity with all coverage options available to consumers. This knowledge is important for agents and individuals who play a new role for the 'Healthcare Browser'. Explorers will receive federal funding to help educate the public, distribute information about registration and outstanding credits, and provide registration assistance. NAHU believes that navigators duplicate the role of licensed agents and question the wisdom of spending federal funds on these centers. But if navigators are used, they must undergo the same stringent licensing and continuing education requirements as agents.
Marketing and commission limits
There has been talk of restricting agents' marketing activities and commissions regarding their activity on stock exchanges, which NAHU strongly opposes. The rationale is that a precedent for such restrictions – medical care is an advantage – does not apply here at all. For under 65 health insurance markets and small businesses, potential clients often want agents to provide additional information about life, teeth, disability, and other elements of the typical employee benefit package, during a single meeting.
As far as commissions are concerned, we believe they should be determined by private health insurance companies, as they are today. However, health plans have already begun to cut commissions in response to other aspects of health care reform, such as administrative requirements versus the proportion of medical losses. The best segregation of commissions is to combine efforts with the General Management Agency (MGA) that can integrate the sales activity of many agents, ensuring insurance companies a large volume of business.
Will exchanges really help?
It is safe to say that the "jury is out" on this.
Will the exchanges reduce insurance premiums? The answer largely depends on how risk groups are organized. Some argue that separate groupings of individuals versus small firms are more just, as the premiums reflect the risks of these two more different markets. Others say grouping together would allow risks to spread across a larger base, making it easier for everyone to drop prices.
Will exchanges improve the general health of the population? The hope is that visits to costly emergency rooms will decline, among other things, once a greater proportion of the population is covered. Others argue that those with low interest / high discount plans also refrain from seeking preventive or even acute care until it is absolutely necessary. Will exchanges improve the health care buying experience? Probably. In theory, the "apple to apple benefits" process should make shopping easier – as long as it doesn't lead to a multitude of unrecognizable plans that resemble each other and add to consumer confusion.
Like many aspects of health care reform, we agents may have to embrace change and adapt as much as possible to a changing landscape. There is strength in numbers – with your local professional organization and the good MGA that helped you with your insurance agency's business plan, you can navigate these changes safely and with as much knowledge as possible.