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On the Third Hand: Not heaven

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I wrote a news article last week about the efforts of the managers of Colorado’s state-based health insurance exchange, Connect for Health Colorado, to reach out to brokers.

Starting a Patient Protection and Affordable Care Act (PPACA) state-based exchange is really hard. The managers have had to do their work quickly, in a complicated regulatory environment, in the face of conflicting and constantly changing demands from Washington and state capitals.

It’s hard for a reporter to tell whether they have too little, too much or just the right amount of funding, but it seems as if the amount of funding they can actually get, or use for specific tasks, is uncertain.

And one of the reasons health insurers generally welcomed the idea of the government setting up an exchange system is that, over the years, the pioneers that tried to do the job without government help ended up with many arrows in their backs.

See Digital Insurance Gets SimplyHealth Retail Business and Web Brokerage Works With Traditional Brokers

So, on the one hand, I think that, whatever one thinks about PPACA as a whole, or the PPACA public exchange system as a whole, it’s reasonable for reporters to have pity on the human beings struggling to set up and run the exchanges. My instinct is to cover exchanges with operational problems based more on how well the exchange managers disclose and make efforts to fix the problems than on whether they have problems.

But, on the other hand, agents, brokers, insurers and consumers are stuck with actually trying to use the public exchange system, and many focus pretty intently on whether the exchange, or exchanges, they use actually work. This is especially true this year, now that the second PPACA open enrollment period and the various extra wiggle room enrollment periods have ended.

Brokers from all over the country responded to my Colorado exchange article, which had the headline “How to get brokers to love you,” that they might love the exchanges a lot more if the exchanges would make some effort to help them get the miserably low commission payments they’re owed.

Brokers suggested that getting the #%[email protected]#$ed !#@$!%ing websites to work properly would also help.

One broker in Colorado, for example, told me that the new PPACA medical underwriting restrictions and exchange system have tripled the amount of individual health insurance he writes.

He still runs into an occasional problem when he writes coverage by working directly with a carrier. He may face some kind of glitch about 10 percent of the time, and a big underwriting problem once every 15 to 20 sales. But he thinks the level of glitches in that channel is similar to what it was before PPACA came along.

When he sold public exchange coverage during the 2015 open enrollment period, he had to call the exchange or the carrier about one-half of the time, and he ended up having to make several calls over the course of about a week about 25 percent of the time.

“And it’s not like I call and someone answers the phone right away,” he says.

His clients ran into severe, difficult-to-fix problems about 10 percent of the time. Nearly all of the most serious problems have to do with the inability of the state’s Medicaid program to help consumers with Medicaid’s part of the eligibility determination process with anything approaching efficiency.

Now that the regular enrollment period is over, the Colorado broker finds that the exchange system has trouble sending special enrollment period (SEP) information to the carrier almost every time he handles a SEP application.

He’s not sure what Colorado should do about the exchange problems, but he knows he wants to get as far away from the exchange as he can.

On the third hand, of course, advocates of a single-payer, government-run, managed Medicaid-for-all-health system may have designed the exchange system to be as complicated and rickety as possible, to ensure that policymakers would replace the current many-carrier, many-broker health care system with a broker-free system offering a choice of a few aluminum-level (or balsa-level? blade-of-grass-level?) plans from a handful big insurers that really get the government plan administration business.

On the fourth hand, that strategy might have backfired. Some exchange boards have done a good job of at least looking as if they’re still trying to be transparent. They continue to post meeting minutes and thick meeting packets on the Web. 

But some other state-based exchange boards don’t even seem to post board meeting agendas any more. It’s not completely clear whether they still have boards at all, or employees.

Why would the residents of a state that can’t even get its exchange to post a board meeting packet every few months, let alone honest, up-to-date, let-the-chips-fall-where-they-may performance data, trust the government of that state to run an honest zoo, swimming pool or parking meter program, let alone a public health insurance program?

On the fifth hand, the good guys don’t always win, and the bad guys don’t always win. Whether the exchange system is transparent may not correlate well with whether the exchange system eventually becomes effective and useful, and whether the exchange system becomes effective and useful may not have an obvious correlation with how well the system stands up to antiselection pressure.

If the system is sturdy enough to survive antiselection pressure and problems with the PPACA three R’s risk-management programs, it may survive long enough to find ways to make itself more effective, more useful, and (possibly) more transparent.

See also: 3 questions about PPACA World’s stabilizers

If the system can’t withstand antiselection pressure, something else will soon take its place.

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