Agents who receive commissions from health insurers should not serve as health insurance exchange navigators, but exchanges could pay agents to send consumers their way, consumer representatives say in a new comment letter.

The Patient Protection and Affordable Care Act of 2010 (PPACA) clearly prohibits anyone who wants to participate in the new navigator program from receiving commissions from health insurance carriers, the reps say in a letter to the leaders of the Exchanges Subgroup at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo.

“That said, an exchange can contract with producers separately to bring them enrollees,” Navigatorsthe reps say.

Existing health exchanges in Utah and Massachusetts already do that, the reps say.

“Further, there is nothing to prevent an exchange from contracting with producers – either on a [per member per month] or commission basis, to bring in small groups,” the reps say. “Whether it’s an employer-choice or employee-choice model, small business owners and employees will likely continue to rely on producers to understand their options and recommend benefits. In fact, the need for producers may be greater in an employee choice model, in which each individual employee may need help choosing coverage.”

The NAIC provides funding for the reps to help them represent consumer interests in NAIC proceedings.

PPACA, Exchanges and Navigators

PPACA opponents are trying to block implementation of part or all of the act.

If the act takes effect as written, state-supervised health insurance exchanges will help low-income and moderate-income individuals use federal tax credits to buy health insurance through a one-stop shopping process. The exchanges will also sell coverage to small employers.

PPACA calls for navigators – individuals or entities that would not be compensated by insurers – to help individuals use the exchange system.

A state could set up one exchange for its residents or several exchanges, or it could participate in a multi-state exchange program. A state also could decide to the let the federal government run the exchange program for its residents.

The Exchanges Subgroup at the NAIC has been drafting white papers that would express the NAIC’s views about how states could go about setting up and supervising exchanges.

Different Communities, Different Needs

The exchanges are supposed to serve tens of millions of consumers, and the consumer reps say regulations should pursue an “all hands on deck” approach to outreach and enrollment assistance.

“Different communities will have different needs and different levels of trust in potential ‘spokespeople’ for the exchange,” the reps say. “For some, their trusted source of information will be a producer. For others, it will be a local community group or health care provider. For still others, it could be a local business association or labor union.”

Exchange managers should think about the people they are trying to reach and then think about which people or entities would be in the best position to reach those people, the reps say.

“The bottom line: Exchanges will not need either producers or navigators,” the reps say. “They will need both.”

Other Exchanges Subgroup coverage from National Underwriter Life & Health: