Massachusetts may have hurt efforts to sell small group health coverage through its exchange system by infuriating health insurance agents and brokers, researchers say.
A team of Georgetown University researchers led by Sabrina Corlette have published evidence supporting that conclusion in a review of lessons learned from the experience of the Utah and Massachusetts health insurance exchanges.
The Corlette team prepared the review, and the review was published on the website of the Massachusetts Health Connector, the agency that helps run the Massachusetts exchange programs.
If the Patient Protection and Affordable Care Act (PPACA) take effect as written, it will create a system of health insurance exchanges that will distribute individual and small group health insurance starting in 2014.
States can choose to run their own exchanges, participate in multi-state exchange programs, or let the federal government provide exchange services for their residents.
The exchanges could take many different forms, but they are supposed to help users buy health coverage through a simple “one stop shopping” process, exchange advocates say.
Utah and Massachusetts already have exchange programs.
Utah has a reputation for being open to any willing carrier, and Massachusetts has a reputation for actively bargaining with carriers, but, in reality, Utah has had trouble getting all major carriers to participate, and Massachusetts has not yet turned away a carrier that has formally applied to participate, the Corlette team researchers say.
The researchers note that the Massachusetts program has a large, $30 million budget, and that the Utah program has a much smaller budget.
In part because of that difference, and in part because the Massachusetts program is older,
the Massachusetts program has about 220,000 enrollees and the Utah program has 2,200 enrollees, the researchers say.
The Utah program has proven to be complicated for employers and employees, and about 74% of the exchange-using employers that participated in a survey said a broker or agent had helped them with the enrollment process, the researchers say.
“Utah has … found insurance brokers to be critical to the participation of small employers,” the researchers say. “Without an insurance broker to assist in navigating the choices, it appears to be very difficult for small employers and employees to navigate and understand the wide variety of plan options in Utah’s Health Exchange.”
In Massachusetts, regulators lowered administrative fees and jump started small group enrollment by buying a book of business from an insurance intermediary that served “microgroups,” businesses of 1 to 5 employees. Because of that decision, the state has 4,500 small group enrollees in about 1,500 employer groups, the researchers say.
But small group enrollment has been slow to expand, because “many small employers are loyal to their insurance brokers who help them understand their options and access coverage,” the researchers say. “And the brokers, in turn, view the Connector as a competitor that has aggressively encroached on their business and reduced their commissions. As one broker representative noted, the legislature’s intent in creating the Connector was to connect the uninsured with insurance, not to solicit employers already offering coverage. But the Connector has worked hard to do just that, earning the ire of the broker community… [A] broker we spoke to commented on an “insatiable appetite for the Connector to create legislated competitive advantages for itself.”