Insurance agents will need approval for fed exchange

Moving Oregon to healthcare.gov has consequences for agents

By Tara Bannow / The Bulletin / @tarabannow

Published May 15, 2014 at 12:11AM

Cover Oregon was designed to make things easier. In at least one respect, it did.

The state health insurance exchange allowed insurance agents to sell policies without taking the arduous step of getting approved by each company to sell its policies. Instead, getting the thumbs up from Cover Oregon meant agents could sell any policy on the exchange. (Selling outside of the exchange still requires company approval.)

Now that Oregon is moving to the federal exchange because of Cover Oregon’s failed website, that short-lived loophole will soon close and agents will revert to the old method — required under healthcare.gov — of getting approved by each company whose policies they wish to sell.

Heather Carlin with Lumbermens Insurance in Bend sees this as a good thing. As an agent who has specialized in health insurance for decades, she had been approved by each insurance company long before Cover Oregon came around.

Opening the gamut of carriers to all agents allowed some to take advantage of the system by selling and collecting commissions on policies they weren’t truly all that knowledgeable about, she said .

“We call them bandwagoners,” Carlin said. “They saw an opportunity to make some additional income — not that they’re bad people, don’t get me wrong — but if you take someone who has specialized their entire career in insurance in home and auto and you have them try and sell health policies, they’re not going to know the ins and outs of that carrier, that plan, what the differences are that could be really important to a customer.”

Some in the industry say not all insurance agents will go through the process of getting certified by each carrier — instead choosing the few they think will be the top sellers — which could limit their clients’ options.

“That could definitely happen,” said Kristine Akenson, an agent with High Desert Insurance in Bend.

Moda Health dominated private sales through Cover Oregon this year with about 75 percent of the policies sold as of mid-April.

Carlin said that’s because Moda’s premiums were by far the cheapest. Eventually, their rates will increase to match those of other policies once Moda’s actuaries adjust them with their new claims factored in, she said.

“In my 20 years of doing health insurance, I’ve never seen one carrier consistently be the lowest for multiple years,” Carlin said.

When the 2015 enrollment season kicks off in November, Carlin said she thinks we’ll see rates stay similar to this year’s. But by 2016, she predicts a lot of shift, especially in an insurance market as competitive as Oregon’s.

Thus, aside from being a potential disservice to clients, it’d be shortsighted for agents to develop relationships with only a few carriers.

Carriers’ appointment processes don’t differ significantly from one another, Carlin said. They involve paperwork, checking the agent’s serial number and insurance and then product training when the company rolls out new policies. Some carriers maintain agent quotas to make sure they’re selling.

“It’s a lot to keep up on, but by having that appointment, you’re getting information, you’re getting that training, you’re getting the tools you need,” Carlin said.

Michael Welch, president of the Oregon Association of Health Underwriters, said he doesn’t think agents picking and choosing carriers will be that big of a deal.

“At the end of the day, carriers just want to distribute product and get market share,” he said. “Are they going to turn away someone who’s got 100 applications just because they’re not licensed? The answer in all likelihood is ‘No,’ they’ll just figure out a way to get them licensed.”

Agents will, however, be faced with the burden of learning to work with healthcare.gov, a site that, until now, Oregonians haven’t had to pay attention to. Applications will likely be different, as will processing them and enrolling people, Welch said.

“There is going to be a learning curve that appointed agents are going to have to do all over again,” Welch said.

Cover Oregon officials still are unable to provide detail into what those currently enrolled in private plans will need to do come November to keep their plan once Oregon moves to the federal exchange.

Tina Edlund, formerly the acting director of the Oregon Health Authority, is now overseeing the transition project for the private health plans and Medicaid. Conversations with Centers for Medicare & Medicaid Services officials have indicated people will likely need to re-enroll for 2015 coverage, Edlund said at Cover Oregon’s board meeting last week in Durham.

“We’re talking with the federal government about what that would look like and how we can make that as easy a process as possible,” she said.

The more than 36,000 Oregonians who applied to Cover Oregon through agents — nearly 14,000 of those into private plans, the rest into the Oregon Health Plan — will likely rely on those agents for help re-enrolling. Exchange officials revealed at last week’s board meeting that Cover Oregon has yet to pay thousands of dollars owed to the insurance agents for enrolling clients through the exchange.

Cover Oregon is supposed to dole out commission payments, established by carriers, to agents for enrolling clients into policies through the exchange.

Akenson said she’s prepared for that. In the meantime, she said it’s a waiting game until Cover Oregon officials provide more information.

“I’ve done a lot of telling people to calm down, it’s going to be OK,” she said. “I think as time progresses people will see that.”

— Reporter: 541-383-0304,

tbannow@bendbulletin.com