It’s funny to think that, just a few years ago, many of us were worried that the government was creating a do-it-yourself, Travelocity©-like website that might eliminate the need for health insurance agents altogether. Boy, were we wrong.
It is true that Healthcare.gov and the state-based exchanges are significantly better than they were during the first open enrollment period. The sites aren’t crashing anymore, and they do allow individuals to compare their options and apply online without any outside assistance, but how many consumers actually understand what they’re looking at? The reality is that health insurance is becoming more—not less—complicated, and it can be very difficult for the average person to find the right plan without consulting with a professional.
Here are just a few of the reasons why health insurance agents are more important than ever.
Despite their efforts, the administration has fallen short in its marketing efforts. Study after study finds that a significant percentage of Americans are unaware of their responsibility to have health insurance, their eligibility for financial assistance or both. Yes, people who visit HealthCare.gov may have a general understanding of the individual mandate, premium tax credits and guaranteed issue provision, but those who don’t seem to be missing the message.
Many of those individuals the government is reaching are actually getting the wrong message: that price is the most important factor in their buying decision. And they’re hearing this repeatedly. In an October 28 press release, Health and Human Services said that if everyone “switched from their current plan to the lowest-cost premium plan in the same metal level, consumers could save an average of $610 annually before tax credits.” Since that time, numerous articles have cited and expanded on HHS Secretary Silvia M. Burwell’s advice that “shopping may save you money.”
While, ultimately, this tactic will save consumers money on their health insurance premiums, there are two things that are perhaps even more important this year than the plan premium: provider network and out-of-pocket exposure.
Unfortunately, finding the plans your providers accept is easier said than done. Apparently HHS has finally recognized this and responded by launching a beta version of a provider search tool on the HealthCare.gov website. However, this tool is still incomplete and probably won’t be fully functional before the end of the open enrollment period.
As explained on HealthCare.gov: “This year, for the first time we've asked insurance companies for information about which doctors and drugs their plans cover. In this early stage, some data may be missing or inaccurate. We'll be updating it regularly. Check with the insurance company to verify network coverage.”
Partial responsibility for the missing data and inaccuracies lies with the carriers, which provide this information. A recent analysis, as reported by the Los Angeles Daily News, found that there are significant inaccuracies in some of the provider directories that insurance companies post on their websites. This has caused California Governor Jerry Brown to sign a “bill that requires health care insurers to update their provider directories with accurate information.” The bill takes effect in July, so it won’t help consumers during this year’s open enrollment period. Other states are considering similar actions.
When there’s no easy way to search for providers, consumers often fail to check and instead just go with the lowest-priced plan. This can be dangerous. In some markets, the lowest-priced bronze-level plan might work with only a couple of hospitals, and this often doesn’t include those the buyer would choose to visit or even the closest hospital, crucial in an emergency. While some people may be willing to trade their providers for a lower monthly premium, others are surprised with out-of-network claims after it’s too late.
For those who qualify for cost-sharing subsidies, they must buy silver level coverage to receive the additional savings. That does mean a higher premium than bronze-level plans, but the coverage is significantly better. These plans have a lower out-of-pocket exposure and higher actuarial value than a standard plan.
The reductions, though, are not clearly explained; instead, the subsidized plans on the federal marketplace site are just mixed in with all of the other options. The result is that the metallic tiers don’t really help people compare their options. For people with qualifying incomes, a subsidized silver-level plan is not only more affordable but also more comprehensive than a gold-level plan.
Individuals who don’t qualify for a premium tax credit may have other options available to them off the exchange. Some carriers don’t offer Marketplace plans. Those that do participate often have other plan options, sometimes with bigger provider networks, available outside of the Marketplace. But you wouldn’t know that from visiting HealthCare.gov, which means that people who purchase a non-subsidized plan through HealthCare.gov may be leaving money on the table.
More than ever, people who purchase an ACA-qualified plan have significant holes in their coverage and need something else—an accident plan, critical illness plan, or Health Savings Account—to supplement it. Those aren’t available through HealthCare.gov, and most people won’t recognize the need until they’re presented with the options by an insurance professional… or presented with a higher-than-expected medical bill.
Different people have different needs, and just because one person might prefer a copay plan doesn’t mean her husband wouldn’t do better with an HSA. This won’t be immediately obvious, though, to people who are comparing options on their own. When shopping on the HealthCare.gov site, most people enter the information for their entire family before getting a quote.
This is true even for family members who are eligible to enroll in the coverage and pay the full dependent premium (with no employer contribution). Unfortunately, this is a weird rule that many people have trouble understanding, so some folks apply for an advance premium tax credit only to learn when filing their taxes that they weren’t actually eligible and are responsible to pay back the tax credit advance.
These are just a few of the reasons consumers might have trouble shopping for coverage and picking the right plan for themselves and their families, but there are plenty of others. You could probably add to the list with ease. The point is that people need professional advisors, and—as Marketplace representatives aren’t required to be licensed—they won’t find them by calling the toll-free Marketplace phone number.
That’s good news for you. At this time of year, there are plenty of people to help, so hopefully you’re not having difficulty generating leads. The trick is to come up with a system to effectively help as many people as you can as quickly as possible, but with quotes to run, providers and prescriptions to look up and tax credits to apply for, this isn’t a quick process.
We’re only a third of the way through the open enrollment period, but there are only two weeks left to sign people up for a January 1 effective date. That’s a small window, so use your time efficiently. Again, there’s a lot to be done for each of your clients, and it all takes time. Before you complain, though, realize that it’s the complexity of the shopping process that makes agents so important.
As long as buying health insurance remains this complicated (and there’s no sign of it changing any time soon), our jobs are very secure. At AHCP, we wish you continued success during this busy time of the year. If we can help you be more successful, please don’t hesitate to ask.