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PPACA: Producers Contributing to Tenn. Exchange Program

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The Tennessee Insurance Exchange Planning Initiative already has set up a producer advisory group.


Brian Haile, the head of exchange planning initiative, and other initiative officials have formed an agent-broker technical advisory group and an actuarial/underwriting technical advisory group.

“Members of these groups will provide expertise on specific analytical questions to help in the state’s insurance exchange planning process,” initiative officials say.

Tennessee officials also are preparing to get advice from health care providers, consumer groups, and marketing and outreach experts, and they are planning to hold a series of public hearings.

Bill Haslam, a Republican, will succeed Phil Bredesen, a Democrat, as governor Jan. 15, 2011. Bredesen has said he believes Haslam will find the exchange planning work useful no matter approach he takes toward federal health care change efforts.

Provisions in the Affordable Care Act, the federal legislative package that includes the Patient Protection and Affordable Care Act (PPACA), will require states to have a system of state-based health insurance exchanges running in 2014.

The exchanges are supposed to help individuals and small groups buy standardized, federally subsidized health insurance packages that meet exchange program quality standards.

Mark Seghers, a vice president in the Waukesha, Wis., office of Connecture Inc., a seller of Web-based health insurance sales and administration systems, is one of the members of the agent-broker advisory group.

The details of how agents and brokers will interact with the exchange system are still evolving, but Seghers says he believes that producers probably will be part of the system, one way or another.

Technology vendors and consulting groups have been predicting that

health insurance purchasing organizations and Web-based sales systems would replace producers since the mid-1990s, Seghers says.

“The smart brokers knew that wasn’t going to happen,” Seghers says. “There’s no way the broker is going away.”

Many brokers already use Connecture systems to offer a kind of mini exchange for individuals and small groups on their firm websites, and a majority of Web system users still communicate with a “live human” in one way or another before buying coverage, Seghers says.

“They’re using the Internet and the telephone at the same time,” Seghers says.

Some health carriers already have been slashing producer commissions in responsible to new Affordable Care Act rules governing the percentage of premium revenue that must go to medical care and quality improvement efforts, but many of the same carriers are adding bonuses, and the act could bring 29 million new insurance consumers into the market between 2014 and 2019, Seghers says.

“Change is difficult,” Seghers says. “But this represents a big opportunity.”


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