Insurance Brokers Look For Relevance As Health Exchanges Grow
When states and the federal government rolled out online marketplaces to help people buy health insurance on Tuesday, you'd think that old-fashioned insurance brokers would be worried.
All told about $200 million are being spent on a new army of people to help consumers find their way. These navigators, guides or assisters, as they're called, would seem to threaten the business of traditional brokers.
Many brokers work for small independent businesses. So are brokers at risk of becoming the next travel agents, whose ranks were thinned by online shopping?
Many brokers thought so when the Affordable Care Act was passed back in 2010, says Tim Hebert, an ambitious young insurance broker in Ft. Collins, Colo. "Brokers were concerned they were going to be out of business, that the law was designed to put them out of business," he says.
Part of the law led insurance companies to dramatically cut the commissions they paid brokers. And Hebert says the new government-run exchanges were designed to make it easy to buy health insurance.
Brokers "were concerned that the exchanges would set up a federal entity, and that they would have people come to them and enroll [in the exchanges], and that brokers would not be able to help in that and would not be compensated," he says. "So we'd lose the majority or all of our clients to the exchange, putting us out of business."
At the same time, an estimated 20 million Americans, who couldn't afford health insurance before, would be able to get government subsidies to help them buy it. Brokers worried that that subsidized coverage would only be available through the new online shopping portals in every state.
The exchange in Colorado, for example, has a website designed to take people from uninsured to fully covered right at the keyboard.
Christopher Ringwood, who works for the exchange in Colorado, shows off the new site. "So I'm entering the ZIP code and county information, my month and year of birth. I'm now going to browse plans," he says. "If I want, I can add additional family members to get a quote."
The website is backed by a toll-free phone number. In Colorado alone, nearly 200 people are available to take calls.
Shots - Health News
For-Profit Online Insurance Brokers Gear Up To Sell Obamacare