The exchange builders in states with active exchange design programs still seem to be deciding how to work with health insurance agents and brokers.
Mark Hall and Katherine Swartz touch on producer relationship considerations in a paper on exchange construction efforts in California, Colorado and Maryland.
The Commonwealth Fund, New York, a think tank that generally supports the goals of the Patient Protection and Affordable Care Act of 2010 (PPACA), has posted the exchange builder paper on its website.
Hall is a law professor at Wake Forest University, and Swartz is a public health economist at Harvard University.
PPACA opponents continue to fight implementation of the law in Congress, in the courts and elsewhere. The law calls for states to set up exchanges, or Web-based health insurance marketplaces, for individuals and small groups by 2014.
Hall and Swartz say they look at California, Colorado and Maryland in their article because those were some of the first states to enact legislation establishing PPACA-based exchanges.
The researchers review topics such as the makeup of exchange boards, the relationship between exchange boards and the state legislature, how exchanges are interacting with existing insurance markets, and the involvement of stakeholders.
The researchers did not notice enough news of interest about the Maryland exchange program’s relationship with brokers and agents to mention the topic.
The researchers say the California and Colorado exchange builders are trying to reassure producers — but not saying whether or how their states’ exchanges might pay producers.
In California, agents “complained vocally at one point that the exchange would freeze them out of selling through the exchange,” the researchers say. “Efforts have been taken to reassure them that their participation is welcome, especially for the employers’ Small Business Health Options Program (SHOP) exchange, recognizing that most employers rely on agents to help them choose insurance.”
But “the compensation and role of agents remain to be determined,” the researchers say.
The California exchange is a governmental entity, “with strict conflict of interest rules that bar employment or board membership for anyone affiliated with insurers, agents, or providers,” the researchers say.
Insurers have been taking a “wait-and-see” stance toward the exchange, and agents have been even more cautious, the researchers say.
In Colorado, the researchers say, the exchange board is supposed to get a majority of its members from outside the health insurance industry, but the list of the initial appointees includes 3 members who work for large insurers.
Colorado exchange advisory working groups have been meeting regularly since July 2011.
“State planners vowed from the beginning to build the exchange ‘from the inside out,’ with substantial stakeholder involvement,” the researchers say. “It is hoped this will result in an exchange structure and operations that most insurers, employers, and brokers will embrace, or, at least, not actively oppose.”
But, so far, ”insurance brokers are not represented on the board,” the researchers say.
Issues that have yet to be addressed by the working groups or board include matters such as “the extent to which benefit structures might be standardized, how the exchange will be funded and how administrative costs will be assessed, and determining how brokers will be compensated,” the researchers say.