The exchange builders in the District of Columbia are wrestling with questions about how their Patient Protection and Affordable Care Act (PPACA) exchange should work with agents and brokers.
One question is whether an exchange should let licensed health insurance agents and brokers wait until they have actually sold an exchange policy from a particular insurer before getting an appointment with that insurer.
Another question that's come up is whether an exchange should care about "steerage"—intentional or unintentional efforts by brokers to steer consumers toward or away from certain plans—and, if so, how an exchange should try to prevent steerage.
Members of the producer advisory committee at the D.C. Health Benefit Exchange Authority, the agency in charge of setting up the DC Health Link exchange, talk about those questions in a report that could come up for consideration Thursday at an authority board meeting.
PPACA opponents have ramped up efforts to kill the law. If the work takes effect as written and works as backers expect, it will require federal and state agencies to have exchanges, or health insurance supermarkets, selling health insurance for individuals and small groups by Oct. 1, with the first coverage sold to take effect Jan. 1, 2014.
The District of Columbia is setting up its own district-based exchange.
The D.C. exchange authority has raised producer eyebrows by working to require all new individual health insurance sales to go through the exchange in 2014, and to eventually move all small-group sales onto the exchange. Brokers could still advise the employers, exchange officials have said.
But the producer advisory committee includes several producers and insurance company representatives, along with consumer representatives. And the facilitator is Janet Trautwein, the chief executive of the National Association of Health Underwriters (NAHU).
All committee members agreed to oppose the idea of letting producers wait until they have actually sold an exchange plan, or "qualified health plan" (QHP), from an exchange carrier before getting an appointment with that carrier.
"Producers, carriers and consumers agreed that it was critical that a broker’s [errors and omissions] insurance be checked before that broker was allowed to sell a carrier’s health plan," the committee said in the report.
"Requiring appointments with carriers after a sale leaves carriers and the exchange potentially liable for any mistakes made by the broker and fails to protect the consumers in a way that generates confidence in exchange health products and brokers selling them," the committee said.
Committee members agreed that the exchange should simply try to make getting an exchange carrier appointment as easy as possible. The committee also noted that one concern is that steerage could lead to producers steering consumers with health problems toward certain exchange carriers.
"Most state exchanges have yet to fully resolve this issue, but the approaches being considered include: establishing a compensation structure for all brokers in the exchange; having the carrier paying the commission for products sold in the exchange; requiring the same compensation inside and outside the exchange," the committee said. "A few state exchanges are requiring all brokers to be appointed by all carriers and all carriers to appoint all brokers."
Committee members decided that having all exchange carriers give appointments to all exchange producers should reduce the risk of steerage in the district.
"Because of the relatively small market and the all-appointment requirement, producers have a strong incentive to help the consumer make the right choice," the committee said.