Anthem Inc. (NYSE:ANTM) is cutting commissions for off-season sales of individual major medical insurance for people under age 65 in at least some states.
Agents in Connecticut, Georgia, Ohio and Wisconsin have reported receiving the compensation change notices.
In a copy of the notice for Ohio agents, which was posted by the brokers who run InsureBlog.com, Anthem says it will eliminate commissions for sales of individual SEP coverage for coverage with effective dates from April 1 through Dec. 31, whether the coverage is sold through a PPACA public exchange or outside the exchange system.
“We believe this change is necessary to create long-term sustainable pricing while providing consumers with health care that remains affordable,” the company says in the notice. “We know this change will create challenges, but be assured we remain committed to our partnership with you and your clients.”
In a response to the news of the agent comp schedule changes circulating, Anthem released a statement confirming that it is making producer compensation changes.
“Anthem is committed to the public exchange market and the adjustments in our broker commissions do not reflect and should not be interpreted as a change in our support for this market,” the company said in the statement. “Anthem remains fully committed to the public exchange market and will work with all stakeholders to ensure the viability and sustainability of the public exchanges.”
Many other big players in the individual health market have recently announced similar moves to eliminate or sharply reduce individual SEP commissions.
The Patient Protection and Affordable Care Act (PPACA) now keeps insurers from considering most factors other than location and age when deciding whether to issue individual coverage, and it keeps insurers from considering factors other than location, age and, in some markets, tobacco use when pricing coverage.
Federal regulators, state insurance regulators and insurers developed the PPACA individual health insurance “open enrollment period” system, or limits on when people can buy individual health coverage without showing they qualify for a special enrollment period (SEP), to keep people from using the strict underwriting rules as a chance to wait until they get sick to pay for coverage.
Insurers have complained in recent weeks that enforcement of SEP eligibility rules seems to be weak, and that enrollees who come in through the SEP process have much higher claims than other enrollees.
The Kentucky insurance commissioner has suggested that mid-year agent comp cuts might violate the state’s rate-approval rules. Managers of California’s state-based exchange have suggested weak agent comp could backfire, by making it harder for consumers to apply for coverage and increasing the odds that the consumers who do take the time to apply will be sicker than the consumers who give up on the idea of getting coverage.
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