PPACA Toolkit: Exec Expects Exchanges to Absorb Producers

Steve Auerbach, the head of a company that supplies the innards of many large health insurance exchanges, says he is hungry for good agents.

Auerbach is president of Connextions Inc., Orlando, Fla., a health insurance technology company that recently was acquired by OptumHealth, which is, in turn, a unit of UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH).

Connextions is already selling systems that many large health carriers use to manage consumer relationships, and it supplies technology and support services used by many existing public and private health insurance exchange programs.

Auerbach – who worked as executive vice president of operations at UnitedHealth before shifting over to Connextions – says blaming the Patient Protection and Affordable Care Act of 2010 (PPACA) for threatening to displace health producers with a new system of health insurance exchanges is probably a mistake.

PPACA opponents are working to get Congress to repeal parts or all of PPACA and they also are trying to persuade the U.S. Supreme Court to overturn the act.

If the act takes effect as written and works as drafters expect, starting in 2014, individual consumers and small groups that qualify for government subsidies are supposed to be able to buy coverage through the exchanges. Some states may be able to let higher-income individuals and small groups that do not qualify for subsidies buy coverage through the exchanges.

Agents and brokers have wondered how they will get paid – and if they can get paid – for helping exchange customers, and whether a new system of “Navigators” that PPACA is supposed to help customers use the complicated new exchange programs – will further erode producers’ position.

Auerbach said he thinks rapid growth in exchanges is inevitable, with or without PPACA.

“It’s clear that the current system is broken and unaffordable and not sustainable,” Auerbach said in an interview.