WASHINGTON BUREAU — The role that insurance agents play in the health insurance marketplace in 2014 and beyond will likely be left up to the states, according to Joel Ario, head of the insurance exchange bureau at the U.S. Department of Health and Human Services (HHS).
Ario said states will also have flexibility in determining the role of agents in a new “Navigator” system that is supposed to help consumers and small businesses use the new health insurance exchange distribution system that is supposed to be created by the Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act (PPACA).
PPACA opponents are trying to repeal the law, change it or block implementation.
If the exchanges provisions take effect as written, the exchanges are supposed to distribute subsidized health coverage to eligible individuals and small businesses starting in 2014.
A state can run its own exchange program, participate in multi-state exchange programs, or let HHS provide exchange services for its residents.
Ario talked about the role of agents here at a conference organized by the National Association of Health Underwriters (NAHU), Arlington, Va.’
HHS would prefer to see states manage the exchanges, and the federal government will step in “only if there is no alternative,” Ario said.
Some agents fear that the government could use the Navigator system to shut agents out of the health insurance system.
Each state will be able to define its own exchange “Navigator” program, and each state likely will have the authority to decide whether its navigators must be licensed insurance producers, Ario said.
“The intent of the Navigators is not to replace agents,” Ario said, but to reach out to “hard-to-reach populations not currently served by agents.”
This market segment includes the “less affluent who are going to get coverage through the exchanges,” Ario said. “I don’t see a conflict between the agents and the Navigators.”
States will have to figure out the role of brokers in the individual market and state exchanges, but brokers are almost sure to have a presence in the exchange programs set up to serve small businesses, Ario said.
There is widespread agreement that “if it’s going to work, the agents have to be part of the process,” Ario said.
HHS plans to release the first round of exchange-related regulations in late spring and a second round in the fall, Ario said.
In later comments, Susan Voss, the Iowa insurance commissioner, seem to imply that the states also expect agents to have a strong role in the exchange programs.
She did so by strongly endorsing agent involvement in marketing of all health insurance products, noting that state insurance departments “just don’t have the people to serve the consumer they way the agents do today.”
State insurance officials understand that an insurance policy is an intricate product that is not easily understood by the consumer, and that the agent’s role is critical to having the consumer understand the available choices, Voss said.
Another contentious PPACA provision, the medical loss ratio (MLR) provision,