Thursday, August 22, 2013 As of 2:49 PM EDT
- August 22, 2013, 2:49 p.m. ET
Meet the Government’s Health Insurance Salesmen
By Jen Wieczner
The government announced last week that it’s spending $67 million on staff known as “navigators” to help people enroll in health insurance for next year. But at the same time, it has handed off the enrollment baton to insurance sales agents and brokers, whom insurance companies pay for signing people up for their plans.
The Centers for Medicare and Medicaid Services reached agreements with at least five online health insurance brokers, making it possible for people to get their health plans there instead of on the government exchanges–similar to the way consumers can shop for airfare on Expedia or Orbitz rather than buying tickets directly from the airlines.
Among the brokers, which primarily sell individual health plans, are eHealth(EHTH), Towers Watson (TW), HealthCompare, Getinsured, ConnectedHealth and GoHealth. And there may be others. CMS says it can’t yet confirm how many brokers have received authorization to enroll eligible consumers in tax-subsidized health plans in the 36 states where the government will operate health insurance exchanges starting Oct. 1.
“The government is essentially deputizing us to help them enroll more people, which is really important,” says Bryce Williams, managing director of Towers Watson’s exchange solutions and founder of ExtendHealth. “It’s really not the government’s bailiwick.”
There are a few reasons the government will need help–mainly that their support staff, the navigators, might not provide the same level of customer support as the private brokerages, some insurance professionals say. While the Department of Health and Human Services expanded the reach of the navigators–federal funding increased $13 million from the $54 million originally planned–it also tied their hands from performing the key role that brokers have always played in insurance enrollment: navigators are not allowed to advise consumers on which plan to choose.
In prohibiting navigators from making recommendations or directing consumers to health plans, the government intended to rid the new health exchange marketplace of the biased influence of the insurance industry–namely, agents and brokers who earn commissions for enrolling people in certain plans. The navigators are not allowed to have any ties to health insurers or carriers, and have to undergo about 30 hours of online training, which teaches them to remain neutral and avoid bias, says Tracey Keiser, president and CEO of The Keiser Group, a health care benefits strategy and consulting firm. But the rule reduces navigators to little more than hand holders, some argue. “They’re there to help the people enroll and that’s it — they’re not really there to give them advice,” says Keiser. “The only assistance they can provide is how to choose the coverage, not which coverage to choose.”
And that might not be enough for the 25 million to 30 million additional consumers expected to enroll in health insurance under the Affordable Care Act. Consumers will be hungrier for personalized advice and recommendations than ever, Keiser predicts: “Without a doubt, the average person is going to say, What should I do? And they’re going to expect someone to give them answers.”
After all, in order to find an appropriate plan, consumers will have to not only consider the upfront cost of the insurance policy, but also their specific health conditions and how the plan will cover their needs. “Matching them to the right plan is big,” Williams says. “It’s going to be more akin to having to do your taxes, and less like buying a scarf on Amazon.”
Of course, unlike the government, brokers earn commissions for enrolling people in certain insurance plans, which a fact that surely informs their advice, consumer advocates say. They might try to influence the consumer by presenting plans that don’t pay them commissions after the ones that do, or not at all if they aren’t required by law, says Caroline Pearson, vice president of Avalere, a health care research and consulting firm. “It is not a level playing field in that sense,” she says.
Consumers should be wary of sales pitches for additional products they don’t necessarily need to comply with the ACA mandate, says Laura Adams, senior insurance analyst for InsuranceQuotes.com, part of Bankrate.
That said, the commissions, which amount to about 4% to 7% of monthly premiums, are always built into the price of health plans, so people will pay the same amount no matter where they enroll, Williams says. If consumers don’t use a broker, the insurance carrier just keeps the commission.
CMS, for its part, has acknowledged that brokers and agents will play a part in the new insurance exchanges. “We anticipate that many consumers will want to obtain professional advice from agents and brokers when applying for and selecting a qualified health plan,” it writes on its website about the consumer assistance available in the marketplaces.