Health insurance brokers set to exit exchange if commissions go

Mary Jennings, a health insurance broker from Westport, has been helping people purchase plans through the state health insurance exchange since its inception in 2014.

Jennings is one of more than 250 brokers certified to help customers navigate the state exchange, Access Health CT, and find the plan that best fits their needs. But next year, she said, she won’t be helping customers anymore if the health insurers on the exchange decide to eliminate the already-low commissions they pay to brokers like her.

As state regulators consider rate proposals for next year, both of the carriers set to remain on Connecticut’s exchange – Anthem and ConnectiCare – could eliminate their commissions for brokers in 2017, creating uncertainty as brokers and customers plan for the coming year. Anthem said earlier this year it would eliminate broker commissions while ConnectiCare has yet to decide.

Many brokers have indicated they will leave the exchange if they do not receive sufficient compensation.

Since brokers are involved in about 40 percent of the plans sold on the exchange, according to officials at Access Health, their exit could have a significant impact on enrollment next year. The situation is “difficult,” Access Health CEO Jim Wadleigh said, adding that there would be consequences if broker commissions are taken away.

“We will lose a well-functioning process to assist residents of Connecticut in the selection of health plans,” Wadleigh said. “There’s confusion and uncertainty with (brokers). We’re really not sure how to proceed at this point.”

The looming question of how many brokers will leave comes as the exchange has suffered a number of blows in recent weeks.

Two of the four carriers currently on Access Health – the state’s health insurance co-op, HealthyCT, and United Healthcare – will not be offering plans next year. Furthermore, the remaining two carriers – ConnectiCare and Anthem – are proposing sharply higher rates for the coming year.

Exchange officials have been unsuccessful in attracting new carriers to the exchange. Connecticut-based Aetna announced this week it would not be joining Access Health or expanding to any other state exchanges because of significant financial losses on the plans it currently offers on 15 exchanges.

The exchange’s troubles will only increase if commissions are taken away, Jennings said.

“Every independent broker in the state would no longer write a policy – period,” Jennings said. “They might help select individuals if they are also providing other insurance brokership for that individual or family. Many of my colleagues have already positioned themselves to exit.”

Anthem decided in February to eliminate commissions for brokers starting next year on all exchanges where it offers plans. A spokeswoman for the company said the step was taken to keep premiums from increasing even more dramatically. They are requesting an average rate increase of 26.8 percent for individual plans on Access Health.

A spokeswoman from ConnectiCare said it has not made a final decision. The company is requesting a 14.3 percent average increase for individual plans on the exchange.

Jennings said she and other brokers expect ConnectiCare to follow Anthem’s lead, either eliminating commissions or offering nominal ones. A final decision will not come until state regulators complete their review of the rate requests in September.

The potential loss of brokers presents a unique challenge to the exchange, brokers say, because customers they help are generally more satisfied with the coverage they receive. They argue many consumers are overwhelmed by the system, from the number of plans available to the technological challenges of signing up online.

“We go through their prescriptions, their drugs, to make sure they have the best policy for them,” said Mark Russo, a Bristol-based broker with Main Street Insurance. “To cut the broker out of that, I think, definitely hurts the consumer. And even with the limited number of companies, there still are a multitude of plans.”

While there are hundreds of certified brokers, Jennings said about 25 to 30 of them are responsible for handling hundreds of policies each during the open enrollment period. She said all of the 10 brokers she talks to on a regular basis have agreed they will stop working with Access Health if their commissions are not sufficient next year.

Brokers “drive a cost into the process,” Wadleigh said, but he wants to find a solution that works for both the insurance companies and brokers.

Many of the brokers say they have not benefited tremendously from selling plans through the exchange. Existing commissions – which generally are between $10 and $20 per enrollee – produce “pennies on the dollar” for the amount of work required, Jennings said.

Despite this, some brokers say they have worked with the exchange because they know they are helping individuals who badly need health insurance. Jennings said she is a believer in the Affordable Care Act.

“It’s a sad day for the Affordable Care Act in the state of Connecticut that we’re even having this discussion,” Jennings said.