Distributing health insurance leads to daunting mountains of work, and even the successful, transparent state-based exchanges seem to be struggling to keep out from under the mountains.

Growing awareness of the challenges is showing up in documents on the websites of Connect for Health Colorado and Covered California — state-based exchanges that post comprehensive board meeting packets on the Web.

As early as the mid-1990s, private Web-based health insurance brokers were hoping that they could sharply reduce health coverage distribution costs by selling the product through the Web, without much spending on live human beings. Most of the early private Web-based health insurance brokers eventually set up call centers and teamed up with traditional brokers. Many eventually presented themselves more as organizations that fed leads to live human sales representatives than as Web-based insurance sales systems.

The state-based Patient Protection and Affordable Care Act (PPACA) exchanges may be facing pressure to follow that same route.

Originally, many PPACA exchange builders seemed to assume that live humans would simply help uninsured people learn about how health insurance works, and that most consumers would then apply for coverage on their own, through inexpensive-to-set-up, easy-to-use enrollment sites. In Vermont, for example, the exchange suggested in 2013 that its brokers would get $180 per consumer enrolled in 2014, and $120 per consumer enrolled in 2015.

Health policy groups that supported PPACA seemed to see eliminating agent compensation as a quick, easy way to cut health insurance costs.

Reality has turned out differently.

Managers of the Colorado exchange talk about sales and servicing problems in a set of February operations committee meeting minutes and slidedeck on options for managing operating costs.

California business groups that strongly support the PPACA exchange concept hint at the distribution challenges facing Covered California in a letter included in a packet of letters sent to the Covered California board.

For a peek at what’s in the packets, read on. 

Call center reps

1. This year, consumers have been much more likely to enroll in exchange plans using some kind of live human.

In Colorado, as of Jan. 31, 2015, the percentage of exchange plan enrollments coming through agents and brokers has increased to 37 percent for the 2015 coverage year, from 31 percent for 2014. 

Commercial brokers may be crowding out Colorado’s nonprofit “health care guides.” The health care guides had enrolled only 6,758 people in exchange plans during the first 10 weeks of the enrollment period, down from 9,817 for the 2014 enrollment period.

In California, as of Feb. 22, the percentage of enrollees for 2015 coming in through certified exchange agents increased to 43 percent, from 39 percent for 2014. 

The percentage of consumers coming in on their own, without any live-human help, fell to 30 percent, from 41 percent. 

Baby acting like a call center rep

2. Helping exchange users takes longer than exchange builders had hoped, and it takes more live-human smarts than exchange builders had hoped.

In Colorado, Gary Drewes, the interim chief executive officer, sounded a little like a frustrated commercial health insurance broker when noted that the exchange gets no revenue when it helps the many callers who end up enrolling in Medicaid.

Officials noted that helping the 10,000 consumers who have called with problems has taken an average of about three to four hours per problem resolved. In some cases, for example, applicants with irregular income have a hard time getting the system to give them the right premium tax credit estimates.

Offering one-call resolution more often would help, but offering quick, one-call resolution clashes with the budget-saving strategy of hiring temporary staff for the open enrollment periods and keeping the year-round staff as small as possible, officials said.

In California, Mary Watanabe, a staffer in the exchange sales division, told the board in January that there was “a lot of anxiety in the field” among the navigators.

Tracie Stafford, a representative from United Way, said only about one-quarter of her agency’s results in an exchange plan enrollment. The organization’s exchange helpers spend about three-quarters of their time on answering questions, renewing coverage, resolving problems and helping consumers with Web problems, she said.

Cary Sanders, a representative from the California Pan-Ethnic Health Network, said community partners have found that it’s taking longer to enroll people in coverage than they thought, and that people need more help than expected. One group translated an entire glossary of health plan terms into its clients’ language, without getting paid for that work.

See also: Agents ponder health comp cut response

Stone wall

3. Getting exchanges to pay what they promised to pay the live-human helpers can be hard.

Nonprofit navigators in California said procedural challenges are slowing their efforts to collect performance-based pay.

John Arensmeyer, founder of Small Business Majority, and other groups that support California’s small-group exchange program, wrote in a comment letter that, “We are encouraged to hear that agent commissions are almost on track to be paid in a timely manner.”

See also: PPACA exchange tackles commission pay problems