Health insurance agents and brokers drove a significant proportion of enrollment into the Affordable Care Act (ACA) health insurance marketplaces in 2014. As federal and state funding for navigators decreases in the coming years, the marketplaces could look to brokers to play an increasingly important role in meeting the law’s goal of expanding coverage to the uninsured.
In an issue brief published today thanks to support from the Robert Wood Johnson Foundation, colleagues at the Urban Institute and I report the results of interviews conducted in 2014 with insurance agents and brokers in 21 states and the District of Columbia about the rollout of the ACA’s marketplaces. We learned that there are significant obstacles to engaging brokers as enrollment partners – and reasons why the marketplaces may want to approach such partnerships cautiously.
Barriers to Broker Engagement with the Health Insurance Marketplaces
Brokers in almost all states reported impediments to their engagement with the marketplaces, some easily surmountable and some not. These include:
- Clunky IT systems and processes. Brokers reported spending significantly more time enrolling consumers in marketplace plans than in off-marketplace plans. Because brokers are compensated by insurers on a per-enrollee basis, and not by the hours, the extra time needed can negatively impact their profits.
- Poorly targeted training. Brokers would like to see improved and ongoing training targeted towards enrollment procedures and less towards ACA policy details.
- Inadequate customer support. Brokers universally panned the marketplace call centers. “The call center has been horrendous,” summarizes a common view. In addition to long wait times, brokers were frustrated by the lack of knowledge and expertise of call center workers.
- Compensation challenges. Brokers in some states reported difficulties ensuring that the work they did for a client would be correctly attributed back to them (a necessary prerequisite to payment). Others complained about excessively long lag times between enrolling a client and getting paid.
The issue brief also discusses the risks for marketplaces that rely too heavily on brokers for enrollment. A primary concern is the potential for conflicts of interest. Because brokers are directly compensated by insurers and not the marketplaces, and different insurers may pay them different amounts, brokers may have incentives to steer clients to the plans that compensate them the most, and not necessarily to the plan that best meets their needs. In addition, many brokers lack experience working with low-income people and communities with historically low levels of insurance – the target population for meeting the ACA’s goal of expanding coverage. Without established relationships in these communities, many broker agencies may lack the infrastructure and staff needed to meet their linguistic and cultural needs.
Our broker sources had several concrete suggestions for the Marketplaces to increase broker-mediated sales of marketplace plans. However, whether those sales can meet the ACA’s objectives of expanding access to affordable, adequate coverage for the uninsured will depend on brokers’ ability to expand their reach into new populations and provide effective, unbiased counsel on the types of plans and benefit structures that will best meet their financial and health care needs.