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PPACA: Feds Say Their Exchanges Will Love Agents

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The Center for Consumer Information and Insurance Oversight (CCIIO) says “federal facilitated exchanges” (FFEs) will work about as closely with agents and brokers as the states will let them.

CCIIO officials talk about the relationship between the FFEs and agents in a new batch of exchange guidance.

CCIIO, an arm of the U.S. Department of Health and Human Services (HHS), also has released a set of guidance aimed at states that are setting up their own exchanges.

Provisions in the Patient Protection and Affordable Care Act of 2010 (PPACA) encourage states to set up “health insurance exchanges,” or Web-based insurance supermarkets, that individuals and small businesses can use to buy health coverage.

PPACA opponents are fighting the act in Congress as well as in the courts. If the act takes effect as written and works as drafters expect, a state could choose between setting up an exchange, participating in a multi-state exchange consortium, or letting the federal government provide exchange services, or FFE services, for its residents.

Agents and brokers have been wondering just how much state and federal agencies will let them participate in the exchange system, and how likely they will be able to generate significant commission or fee revenue by working with the exchanges.

“HHS expects that licensed agents and brokers will continue to assist consumers in accessing health insurance, and will work with agents and brokers to promote enrollment through the exchange,” officials say in the FFE guidance. “To the extent permitted by a state, an FFE will permit agents and brokers to enroll individuals in a [qualified health plan (QHP)] ‘through an exchange’ if the agent or broker ensures that an individual completes the eligibility verification and enrollment application using the exchange Internet site or the agent or broker’s site that meets certain conditions; the exchange transmits the enrollment information to the QHP issuer; and the agent or broker meets other applicable requirements (an agreement, training, and registration).”

HHS will provide licensed agents and brokers with a portal to the FFE Web site if those producers meet HHS standards, officials say.

Producers can use the portal to help individuals apply for eligibility for enrollment in a QHP and for insurance affordability programs, and if applicable, select and enroll in a QHP through an FFE, officials say.

“To the extent permitted by a state,” HHS wants to work with Web-based brokers that are helping consumers chose health plans online, officials say.

HHS intends to use an application programming interface (API) to help Web brokers help individuals enroll in exchange health plans through an FFE, officials say.

Federal officials have noted that exchange runners could take two different approaches to managing exchange coverage options: Letting any qualified, willing insurer sell coverage through an exchange, or operate as an “active purchaser” and use a bidding process to try to bargain for lower rates.

“At least in the first year, we anticipate having an open market model,” Steve Larsen, director of the CCIIO, said today during a press conference held to unveil the guidance documents. “Then we’ll look at the potential for having other options.”

The Supreme Court is now considering the constitutionality of PPACA and could throw out part or all of the act.

“We believe the law is going to be upheld,” Larsen said when he was asked how he expects the Supreme Court’s ruling to affect exchange program implementation.

Larsen said CCIIO is still developing exchange program cost estimates.

CCIIO officials leave room for the possibility that some states that choose to run their own exchanges may want to shut out agents.

In the guidance aimed at builders of state-based exchanges, officials note in a sample exchange builder application that how a state-based exchange works with producers is up to the state and the exchange managers.

“If the state permits activities by agents and brokers,” officials say in an application question, the exchange should “clearly defined the role of agents and brokers including evidence of licensure, training, and compliance” with the relevant federal regulations.