"Hideous" federal health exchanges halt producer profits

The malfunctioning federal exchanges may be costing producers income as back-logged applications mount higher.

Life & Health


When the 2010 Affordable Care Act was signed into law, many independent agents and brokers feared they would soon go the way of the travel agent. Then, as it was made clear federal navigators would not have the power to recommend individual plans, producers relaxed and saw a growth opportunity for their businesses.

Unfortunately, while many uninsured Americans are clamoring to enroll with producer help, they are meeting with technical glitches and delays that prevent them from submitting applications. That leaves producers unsure if clients will go forward with purchasing plans, providing them with commission.

“It’s been a hideous, atrocious disaster,” said Joshua Weinstein of Anchorage-based brokerage Enroll Alaska, which had hoped to capitalize on the requirement that all Americans carry coverage. “We can’t build business because we can’t get anyone far enough in the process. No one has been able to look at plan selection or find out if they qualify for federal subsidies.”

Scott Allred of Don Allred Insurance in Burlington, N.C., is trying to practice patience as he waits on Healthcare.gov to become fully functional so that he can enroll his clients and collect the commission. Unfortunately, he’s finding it difficult.

 “If people can’t access the marketplace, they can’t input their agent information and the agent will not get credit,” said Allred, who has been connecting with new clients at Wal-Mart in an attempt to boost business. “I have a pile of 42 backed-up applications on my desk because every time I try to access the website, it freezes up or says there’s too much traffic. It’s a nightmare.”

Allred and Weinsten both believe the website malfunctions are a result of an overly-eager Obama administration pushing against recommendations from IT experts to delay the website’s launch.

“Insiders from the team told the White House the website would not be functional by October 1, and to delay, delay, delay,” Allred said. “The administration said no.”

“There was every indication the website wasn’t ready,” added Weinstein.

The two producers are drawing from a Wednesday Washington Post report citing anonymous allies of the Obama Administration who claimed to have approached the president and his team with concerns about a lack of inefficient software code.

U.S. Chief Technology Officer Todd Park told the Associated Press the account-creation requirement on Healthcare.gov is especially responsible for the portal’s difficulties, and blocked millions of visitors from viewing their options or finding out if they qualify for federal subsidies. Fixes are now reportedly underway.

In the meantime, there’s nothing for producers to do but wait. Unfortunately for Mark Anderson, president of Burns Insurance in Burns, Wyo., explaining to clients that waiting is the only option is an exasperating business.

 “We’ve certainly heard from a lot of people that cannot get on. They’re confused and frustrated and we just tell them that they, and us, need to keep trying,” Burns said.

Hopefully for producers, Allred is correct in his guess that clients will “sit and wait it out.” The frustration for some potential clients may be too much, however, meaning a lot of lost commissions for producers.

“Some people say they’re not going back and they’ll pay whatever penalty they have to,” Anderson said.


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