Mandated ACA Commissions for 2017 ?

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Looks like California is at the forefront of saving a consumers access to professional agents, with a little HHS nudge.

California Marketplace May Require Insurers To Pay Agent Commissions | Kaiser Health News



California’s health exchange may require its health plans to pay sales commissions to insurance agents to keep insurers from shunning the sickest and costliest patients.

Covered California is working on a proposal that would force the plans to pay commissions effective next year, said Executive Director Peter Lee. The proposed rules could apply to regular and special enrollment periods, and would leave the specific commission amount or percentage up to insurers, he said.

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Lee said it has become apparent to him that some insurers are trying to avoid sicker customers by slashing their payouts to agents.

“When one health plan says during special enrollment, for instance, we won’t pay commissions, they are hoping insurance agents won’t sell them and they will sell sick people into another plan,” Lee said. “We aren’t going to let the old games of risk selection happen under the Affordable Care Act.”
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This issue began attracting more attention in November after industry giant UnitedHealth Group Inc. announced substantial losses on exchanges across the country and pulled back on marketing, including payments to agents.

Lee said he immediately contacted UnitedHealth, which just joined Covered California this year, and advised the company to keep paying commissions in the state.

A spokesman for UnitedHealth said the company didn’t make any changes to broker commissions in California this year. It has said it will decide by midyear whether to continue selling in Obamacare marketplaces.

Lee also weighed in at the federal level in a letter last month. He urged Health and Human Services Secretary Sylvia Burwell to consider setting a minimum commission and to forbid divergence in compensation between open and special enrollment.

The issue is significant because, despite all the hype about government-run websites making the purchase of health insurance easier, many consumers still turn to an insurance agent for help. In Covered California, insurance agents accounted for more than 40 percent of enrollment last year, compared to the roughly 30 percent of people who signed up on their own online. There were 14,624 certified insurance agents working with the exchange as of last month.
 
This is the same Peter Lee that didn't want agents even involved in Covered California. Now he needs us? What a POS.

Rick

My guess is that he is paying lip-service to this. Positioning himself for a political run at Gov?
 
Leaving it up to the carriers to determine the percentage means they can pay next to zero. If you earn .25% on a sale, then it is essentially the same as zero, because you won't do it. Mandating a set percentage would move this more in the right direction. Say, 5%...
 
why haven't any of our insurance agent advocates like nahu, etc. done this before now?


If I recall correctly, NAHU decided that allowing the government to dictate commission levels wasn't in the broker's best interest.

I've personally been to the capital and visited lawmakers with NAHU, and we certainly had compensation on the agenda. If anything, they've done far more than a single proposal in a single state.

Don't forget, NAHU is on the wrong side of the table. This isn't a superior advising them to keep paying commissions (like the executive director of the exchange is to a carrier), but rather, a representative of an independent contractor they're currently doing business with.
 
If I recall correctly, NAHU decided that allowing the government to dictate commission levels wasn't in the broker's best interest.

Before it all hit the fan, I am guessing nobody saw Carriers completely cutting commissions, so they hedged bets that commission would be better off remaining untouched by the government. Nowadays...brokers and agents need a mandated commission percentage or PMPM amount that keeps their business models sustainable. That is, if you can find affordable leads...
 
All the carriers are losing money on ACA plans. Discussing 2017 commissions on IFPlans is pretty much meaningless if none of them show up. Force them to pay anything over .25% and they won't participate. This will leave only Medicaid and Group.
 
All the carriers are losing money on ACA plans. Discussing 2017 commissions on IFPlans is pretty much meaningless if none of them show up. Force them to pay anything over .25% and they won't participate. This will leave only Medicaid and Group.

They will show up. It may be via threats from Burwell, but they will show up.
 
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