ACA fallout spreads to insurance brokers, agents

Lenay Ruhl//October 7, 2016

ACA fallout spreads to insurance brokers, agents

Lenay Ruhl//October 7, 2016

Capital BlueCross’ decision to stop paying commission to agents “is aligned with our announcement last week to reduce the number of our plans offered on the FFM (Federally-facilitated marketplace),” Capital BlueCross spokeswoman Kirsten Page said.

Insurers typically pay commissions to insurance agents or brokers who sell their health plan products to clients. The commissions are factored into premiums set by the insurers, according to Bob Wagner, president of The Insurance Group Inc. in Adams County.

“The only reason they would be doing this is to slow up the business,” Wagner said of Capital Blue’s move.

As insurers move to ratchet back what they are selling on the ACA market, the fallout is spreading to insurance agents and brokers across the state.

Other moves

Capital BlueCross is not the only insurer adjusting its ACA health plan offerings. Insurers across the country are reducing ACA plans or dropping from the market altogether because they’re losing money.

Insurers argue that unexpectedly high costs to cover health care used by newly insured consumers is outpacing what those consumers are paying in premiums

Highmark Inc. reduced the number of ACA plans it is offering. Its efforts overall to limit its ACA losses resulted in less financial pain, Highmark announced recently.

Wagner said his firm received an email from Highmark that it will only pay commissions to agents who submit business online, either through Highmark’s website or directly to the website of the federal marketplace.

Wagner said the online system is often slow.

“It comes down to, can we afford the time to help the people?” Wagner said.

Wagner is still going to offer clients’ assistance on ACA plans, because his firm has several hundred clients it is already working with.

“We can’t tell people we’re not going to help them. That would reflect negatively on our reputation,” Wagner said, noting that his business is consumer-driven and relies on referrals.

Julie Martin, vice president of Teaman-Martin and Associates said the Lancaster County-based insurance agency decided to stop marketing individual medical coverage under the ACA, because of what happened last year – insurers experienced delays in getting applications processed, so clients who were waiting for health coverage were getting upset.

Although her firm is not selling ACA health plans, Martin is staying up-to-date on the market.

Premium rate increase requests still pending

Both Capital BlueCross and Highmark have asked the Pennsylvania Insurance Department for permission to raise premium rates for 2017 on ACA health plans.

Capital BlueCross factored in commissions for brokers when submitting its rate filings, the department confirmed.

The department plans to announce its decision on the rate increase requests next week, according to department spokeswoman Ali Fogarty.