Wednesday, April 18, 2012

Agents vs. The Exchange Part II

The future role of insurance agents in an Obamacare world is questionable at best. Even if agents are invited to participate, there are many questions that need to be addressed.

What requirements must be met for an agent to be "approved" to participate once the exchanges are established? How will the agent be compensated? Will agents be compensated? Will agents be paid a finders fee or a continuing service fee as well?

Or, will agents be thrown under the bus?

The Lund Report on happenings in Oregon seems to indicate a not-so-promising future for Oregonian agents.

The Oregon Health Insurance Exchange wants to train and use insurance agents to help uninsured individuals and small businesses purchase insurance starting in 2014

So far, so good.

Using the agents makes business sense for the exchange, which can use agents to help people find out about the exchange once it begins providing coverage in 2014, and buy insurance through it.

All true.

The Oregon exchange needs 100,000 to 125,000 enrolled in the plan by the end of 2015 in order to be profitable. Since when are government agencies worried about profits?

The agents working for the exchange, Wirtz said, will be paid by the exchange itself, which will take the commissions from insurance companies and pay them directly to agents. She also said that agents would be given a special training about the exchange and the plans the exchange will offer. The exchange would also develop criteria that would determine whether an agent would work for the exchange.

Special training. Criteria.

Which begs the question, what kind of training, and what is the hiring criteria for navigators that will work for the exchange on salary and have benefits?

And then some legislator had this brilliant thought.

“I have a problem with people being charged when they don’t use an agent,” he said. ““They ought to know what they’re paying for. It should not be hidden, or buried in the costs.”

In other words, if someone elects to buy direct they should get a lower premium.

I figure the folks who want to do it themselves already pay too much any way. Under the current set up, I get quite a few new clients who bought direct from a carrier only to find out the plan doesn't work quite the way they were told by the carrier rep.

I see no reason why that would change with a navigator.

the executive director of We Can Do Better, asked how agents will be “removed,” or fired, if they do not perform adequately. She also wondered how the exchange could find particular information about an agent, such as if they speak a second language and could do outreach to minority communities.

My question is, will these exchanges work the way PCIP has? Will agents be invited to participate and then cut off at the knees once the program hit's their quota of insured individuals?

My guess is, the agents will be thrown under the bus, just like PCIP did.
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