State exchange results leave some agents ecstatic, others underpaid

Insurance agents were vital to the success of state exchanges, but while some are honored, others still wait to be paid.

Insurance News


While analysts and insurers focus in on the results of state health insurance exchange’s first year, one theme has remained undisputed: Predictions that insurance producers would go the way of the travel agent were dead wrong.

Despite nationwide reliance on an independent adviser, however, producers themselves are left a bit flummoxed on how to consider the results of the past few months. In some states, agents are finally enjoying their spot in the sun. In others, they’re left empty-handed and, perhaps more importantly, empty-pocketed.

In California, Covered California officials initially estimated that about 80% of consumers would seek assistance in applying for health coverage through the exchange. That estimate was fairly accurate, though new figures reveal that Californians relied not on state-hired enrollment counselors, but on the 12,000 insurance agents certified to help consumers enroll.

In fact, insurance agents enrolled roughly 40% of the 1.4 million California residents who signed up for an exchange health plan. Agents reached consumers across all income levels and demographics, including the much talked-about Latino community.

In response, Covered California Executive Director Peter Lee told the Los Angeles Times he plans on relying even more heavily on agents during the next open enrollment period.

“The people we are seeking to insure next year will be harder,” Lee said. “They will be less familiar with health insurance and they will need to sit across the table from an agent.”

Up north, however, agents have not been so fortunate. A Cover Oregon board meeting last week revealed that the troubled Oregon marketplace owes about $900,000 to agents who were trained and certified to sell exchange plans.

In Oregon, agents sold roughly 18% of private plans on the exchange. Cover Oregon interim executive director Clyde Hamstreet confirmed that the corporation had sent out about $200,000 in commission checks to agents, and plans to send more this week.

The problem of missing commission is not unique to Oregon. Olympia, Wash. agency owner Dan Eich earlier told Insurance Business he had not been paid at all.

“I haven’t been paid for any of these applications that have gone into the state system,” he said. “I’m certain the carriers will make payments eventually, but it’s just taking forever for all the files to be transported from the state.”

Eich is leaning toward not participating in the state exchange next year based on the time and effort he put into becoming certified and helping enrollees sign up for insurance. Other producers, however, are more cautious. They plan on doing a profit and loss statement before committing to a particular course of action next year.

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