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California exchange builders: Agents warming up

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Health insurance agents and brokers seem to like the new California health insurance exchange program once they hear how the exchange builders expect it to work.

Larry Bye, a consultant with a think tank affiliated with the University of Chicago, delivered that message earlier this week at a California Health Benefit Exchange board meeting.

The board meets monthly to review progress in setting up California’s “Covered California” exchange system.

The Patient Protection and Affordable Care Act of 2010 (PPACA) requires state and federal agencies to set up exchanges, or health insurance supermarkets, for individuals and small groups by Oct. 1. California is running a state-based exchange market for individuals and a Small Business Options Program (SHOP) exchange market for small employers.

Bye told the board about conversations his organization had with “key decision-makers in the small business market,” according to a written version of his presentation included in a meeting document packet.

Bye’s group organized eight focus group sessions with small business owners and benefits members in November 2012. The group also talked to agents and brokers.

Bye’s group wanted to “explore general attitudes” about PPACA-related changes, and to “assess interest in shopping for an insurance plan in the new marketplace, as well as interest in actually enrolling in a plan,” Bye said, according to the written version of the presentation.

When Bye’s group talked to the business owners, “respondents expressed a desire to provide health care for their employees,” Bye said. “Many smaller businesses viewed providing health care as a business milestone towards which they strive.

Many business owners and benefits managers seemed to like the idea of the SHOP exchange resembling Orbitz or Expedia, Bye said.

“Though insurance agents were not viewed particularly favorably by respondents, some expressed a desire to work with an agent to navigate the new exchange; many said they would shop on their own,” Bye said.

The producers Bye’s group talked to seemed to know somewhat more about the exchange program, but they “generally lacked basic knowledge of how Covered California will work,” Bye said.

“Many agents initially expressed disapproval of the exchange because they (incorrectly) believed it would exclude them from the process,” Bye said. “Once it was explained to agents how they would interact with Covered California, they became supportive, seeing it as a useful sales tool.  Agents were more optimistic than small business representatives about the likelihood that businesses would use Covered California to purchase coverage.”

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