The third annual open enrollment period under the Affordable Care Act is now over and in the record books, so it’s time to start looking ahead to the next OEP, scheduled to begin on November 1, 2016. This is important because there are likely to be some big changes coming to next year’s ACA plans for the 2017 open enrollment period, changes which could impact your conversations with existing clients and the way you market individual health plans between now and November.

1. Fewer Carriers

We know all about the consolidation in the marketplace in 2015: Aetna’s buying Humana, Anthem is buying Cigna, and Centene is buying Health Net. These deals still need to clear some regulatory hurdles, but they’re expected to close some time in 2016. That alone will reduce the options available in some markets.

Additionally, some carriers may  decide not to participate in the Marketplace in 2017. Specifically, UnitedHealthcare has made no secret of the fact that exchange business has not been profitable, lowering revenue expectations and attributing the losses to exchange business. United is “evaluating the viability of the insurance exchange product segment” and will decide mid-2016 whether or not to participate for the 2017 enrollment period.

Finally, about half of the CO-OPs (Consumer Operated and Oriented Plans) have already failed, leaving consumers searching for other coverage in a number of markets. Though HHS remains committed to the CO-OP program, the future of most of the remaining CO-OPs remains uncertain.

2. More Standardized Plans

As Kaiser Health News explains, the federal “government wants to create six plan options at the bronze, silver and gold metal levels, each with standard deductibles, maximum out-of-pocket spending limits and copayments or coinsurance for various services. In addition, primary care and specialist doctor visits and prescription drugs would not be subject to the deductible in the standard silver- and gold-level plans.” 

These may be changes welcomed by consumers who have had to make the tough decision to purchase higher deductible plans with no up-front copayments because those were all that their budgets would allow. If HHS creates standardized plans which it promotes to consumers, carriers that want to grow their individual business may price the new plans competitively, especially if they believe they’ll attract younger, healthier consumers. We’ll have to wait and see what the government comes up with.

3. More Restrictive Provider Networks

During the 2016 ACA open enrollment period, brokers and consumers alike were frustrated by smaller provider network plans with no out-of-network options. There were no PPOs at all in some markets, and 30% of the PPOs offered through the Marketplace offered no out-of-pocket cap according to a Kaiser Family Foundation report about a new analysis by the Robert Wood Johnson Foundation.

This trend toward more restrictive networks will likely continue next year, though two things could impact the size of these HMO and EPO networks:

  • First, large hospital groups are scrambling to join the networks and, with those contracts, usually come some new doctors as well.
  • Second, the National Association of Insurance Commissioners is working on a Network Adequacy Model Act, which is intended to provide greater consumer protection by pushing plans to establish sufficient network adequacy.

What impact, if any, these two developments will have on existing networks remains to be seen.

4. Commission Uncertainty

Another disturbing trend that we witnessed during this most recent open enrollment period was the reduction—and in some cases—elimination of broker commissions on certain products. We saw this more among carriers that offered broader network plans than their competitors. Because a large network PPO plan that offers out-of-network options is at risk for adverse selection if all of its competitors are offering HMOs, the carrier might try to discourage enrollment by halting broker commissions.

It’s certainly not fair to agents who place business with the carriers, but some insurance companies apparently felt they had no choice. Hopefully, this trend will reverse for 2017, but right now we don’t know what will happen.

Additionally, the National Association of Health Underwriters (NAHU) and other trade associations continue to lobby for the “broker bill” that would remove agent commissions from the Medical Loss Ratio calculation. There are versions of the bill in both the House and the Senate, both with bipartisan support, but in an election year the bill’s passage is not guaranteed.

The best advice we can give brokers who want to protect and grow their income, regardless of future actions by insurance companies or government agencies, is to diversify. If you sell more products, you’ll make more money. It really is as simple as that. At AHCP, we have a full suite of products you can offer your clients, and now is the perfect time to talk with us about expanding your portfolio.

5. Continued Broker Involvement

Finally, we can expect brokers to have a continued role in selling individual health insurance products. Sure, some carriers are cutting commissions and the government continues to employ navigators and assistors, but we all know that brokers are still the best distribution channel there is. The government has not built a better mousetrap, and today’s healthcare consumers are more—not less—confused about their health insurance options. CEO Kevin Counihan seems to agree. The Advocate reports on a recent event hosted by the Baton Rouge Association of Health Underwriters, at which Counihan said that the ACA “is confusing and complicated, which means that health insurance agents and brokers are needed to help consumers pick the best plans for them.” As long as there’s a need for trusted advisors, and that’s unlikely to change anytime soon, brokers will continue to have a promising future.