Individual Market Insurance Brokers Report Improved Consumer Options, But Also Risks from Short-term and Other Alternative Products

Changes in federal and state policy have caused turmoil in the individual health insurance market in the last several years. For policymakers and other stakeholders, it is important to understand how these changes have affected consumers’ access to affordable, high-quality coverage. Insurance brokers sell almost half of Affordable Care Act (ACA) marketplace policies, as well as many alternative products, such as short-term plans. They are a critical resource for understanding the impact of policy changes on consumers’ experiences in the individual market.

In a new report, CHIR researchers teamed up with the Urban Institute to assess market trends and interview health insurance brokers in seven states to gain insight into how the individual market is working for consumers. Key findings include:

  • Brokers’ financial incentives to serve individual market customers remains low, despite recent improvements in compensation from some carriers. Compensation for selling short-term and other alternative insurance or insurance-like products is higher than compensation for selling ACA-compliant plans.
  • In many markets, consumers have an improved choice of insurance companies and plans, but many remain frustrated by narrow networks.
  • Lower 2020 plan premiums in some markets had the perverse effect of increasing costs for subsidized marketplace consumers. Although unsubsidized consumers appreciated such declines in premiums, affordability remains a top concern.
  • Brokers report limited early interest among their employer clients in the new Individual Coverage Health Reimbursement Arrangements (ICHRAs) promoted by the Trump administration.
  • Many brokers view short-term plans and other products that do not have to comply with the ACA as risky for consumers who may not fully understand their limited benefits, although others appreciated having additional options for healthy people who found ACA coverage unaffordable.

You can read the full report here.

The report was made possible thanks to the generous support of the Robert Wood Johnson Foundation.

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