PRODUCERS SEE FUTURE THROUGH THE FOG OF HEALTH REFORM a bleak outlook, but agents will be more necessary than ever because no one else will be there to guide people through the process of getting coverage.” Crosby does business in California and Colorado, two states that are creating their own exchanges to enable consumers to purchase health insurance instead of allowing the federal government to set up an exchange for them. He said that his state, California, will use agents as part of the exchange. Even though health insurance exchanges will enable someone to go online to purchase health insurance, “95 percent of clients still want to meet with a professional and discuss their options,” Crosby contends. Under the provisions of the Affordable Care Act (ACA), every state must have a health insurance exchange in place by 2014. As of Dec. 1, 17 states plus the District of Columbia indicated to the Department of Health and Human Services (HHS) that they would implement their own exchanges, six states are planning a partnership exchange with the federal government, 17 states will let HHS conduct their exchanges for them, and the remaining 10 states have not made a decision. The ACA implementation timetable itself could work in an advisor’s favor, said one consultant. Dave Racer, chief executive officer of the Coalition for Healthcare Redesign and the author of eight books on health care reform, said he believes the timetable for implementing Obamacare will not be completed in a timely fashion, and that could be good news for agents. “Governments are never ready to do anything on time,” he said. “I believe agents have an extended life because of the ineptness of government.” “I think the reality is that agents have a few more years left in the business.” With HHS releasing new guidelines on ACA on an almost-daily basis, “there are so many unknowns right now,” said Colleen Callahan, president of Callahan Insurance in Pleasant Hill, Calif. Callahan’s practice focuses on the small group and individual health insurance markets. “Being able to tell a client in January what to expect for the rest of the year is difficult,” she said. “I know that the expectation for a good agent will be to educate their clients.”
HEALTH
What is an exchange? State-based health insurance exchanges, or marketplaces, are a key component of the Affordable Care Act (ACA). They are the places where individuals and small businesses will be able to shop for coverage. Each state has three options: 1. Choose to operate its own exchange 2. Partner with the federal government to run an exchange 3. Default to a federally-facilitated exchange (this will happen if a state chooses neither of the first two options) The Department of Health and Human Services (HHS) recently extended the deadlines for states to make their decisions. States were given until December 14, 2012, to decide whether to run a state-based exchange, and until February 15, 2013, to opt for a partnership exchange All exchanges must be ready to begin enrolling consumers into coverage on October 1, 2013. All exchanges must be fully operational on January 1, 2014.
What will the exchanges do? State-Based Exchange: The state will perform all exchange-related activities, including contracting with health plans, providing consumer outreach and assistance, and building the necessary information technology (IT) infrastructure to assess eligibility and enroll individuals into coverage. States have the option of using federal services to determine eligibility for premium tax credit and cost-sharing reductions, as well as to operate the risk adjustment and reinsurance programs. State-Federal Partnership Exchange: States opting for a partnership exchange can choose to operate certain plan management functions, certain consumer assistance functions, or both. In addition, a partnership state can elect to conduct Medicaid and Children’s Health Insurance Program (CHIP) eligibility determinations or allow the federal government to perform this service. In all partnership states, HHS will perform the remaining exchange functions and ensure the exchange meets ACA standards. Federally-Facilitated Exchange: HHS will assume primary responsibility for operating an exchange in that state. The federal government will seek to coordinate with state agencies on multiple fronts, including plan certification and oversight functions, consumer assistance and outreach, and on streamlining eligibility determinations for the exchange and Medicaid. Over time, states in a federal exchange may transition into a partnership or state-based model. Not much is yet known about how the federal exchanges will operate, Guidance released in May 2012 revealed some initial policy decisions. The guidance indicates that federally-facilitated exchanges will adopt a clearinghouse model and contract with any health plan that meets all certification standards as a Qualified Health Plan (QHP). The federal exchange will determine eligibility for individuals’ premium tax credit and cost-sharing reductions. In addition, the federal exchange will establish Navigator programs with a role for agents and brokers to assist consumers in accessing health insurance.
What’s ahead for 2013? Look for more federal guidance to become available as the 2013 legislative session begins. The federal government faces increased pressure to operate federal exchanges in a growing number of states. To date, 23 states have decided they will not build a state-based exchange and will likely default to a federal exchange; in addition, HHS will remain responsible for operating most components of the partnership exchanges, which are expected in nine states.
January 2013 » InsuranceNewsNet Magazine
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