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Reform Update: Online insurance brokers get to play on federally run exchanges


By Jonathan Block
Posted: August 1, 2013 - 4:15 pm ET
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Increasing enrollment in health insurance is one of the primary goals of the health reform law. The CMS took a major step to achieve that this week by signing agreements with five Web-based insurance broker firms to help enroll Americans in the insurance exchanges in the 35 states where the federal government will run them.

The participating Web-based brokers each will set up a website that is linked to the state insurance exchange websites. Individuals will be able to enter information on where they live, age and income to determine plan rates and whether the individual is eligible for subsidies. It will be possible for the Web-based brokers to determine eligibility because their sites will communicate with the federal data hub. If necessary, customers will be able to contact a broker, either online or over the phone, for support.

Earlier this summer, the CMS released draft agreements for Web-based brokers looking to enroll people in the federally run exchanges. It will make available an application programming interface that would let them integrate their websites with the exchange offerings.

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Web-based brokers that have signed agreements so far include eHealth, the largest insurance Web broker in the country, and Getinsured.com, the CMS said. These agreements include a number of security and privacy considerations to ensure that consumers' data and information will be protected. The next step is working with these Web-based brokers to test the application programming interface and ensure that their Web portals will be operational for open enrollment.

Web-based brokers offer insurance and enrollment through a website directly, though individuals can chat online or via phone with a live registered broker. Unlike exchange navigators and other in-person assistors available to help people enroll in exchange coverage, Web-based brokers will be able to recommend health plans to a customer.

Gary Lauer, eHealth's CEO, says allowing Web-based brokers to facilitate enrollment on exchanges—including helping those who are eligible for subsidies—is a win-win for consumers and the government.

“The ACA is going to succeed or fail based on enrollment,” he says. “It's critically important that there are multiple paths to enrollment … and (Web-based brokers) are another power pathway to enrollment.”

Lauer added that WBEs will save the government money because they will be paid directly by insurers through commissions.

Brian Cook, a CMS spokesman, said, “We have worked to ensure consumers will have a wide range of ways to sign up for health coverage this fall, including working to ensure Web-based brokers a part of this effort. We have developed ways to integrate many private Web-based brokers with the Marketplace website, which will allow consumers to simultaneously apply for coverage and tax credits.”

eHealth is also seeking authority to enroll people in the 14 state-run exchanges, Lauer says. But last month, exchange officials in California and New York said they would not allow Web-based brokers to enroll people in their exchange, citing logistical issues.

Not everyone is happy about Web-based brokers selling exchange plans. In its comments to a proposed rule on Web-based brokers, consumer advocacy group Families USA expressed concerns that these brokers might steer consumers to plans that are better for the brokers but may not be best for the consumer.

Obama to intervene in Congress, healthcare issue

President Barack Obama privately told Democratic senators Wednesday that he's intervening personally to resolve the issue of how members of Congress and their aides receive health coverage through the federal government. Under a Republican-proposed provision, the Patient Protection and Affordable Care requires lawmakers and their staffers to get coverage through the state insurance exchanges. But there are no provisions in the ACA for people obtaining individual coverage through the exchanges to also receive a premium contribution from their employer. Members and aides currently have about 75% of their premiums paid by the government in the Federal Employees Health Benefit Program. Congressional offices are waiting for a ruling from the federal Office of Personnel Management on whether the federal government can continue to pay their premiums in the exchanges. If not, aides and lawmakers would have to pay their premiums fully out of pocket, and lots of aides say they would quit their jobs. Members of Congress in both parties want to fix this glitch, but the Obama administration fears that letting Congress tinker with the law will give Republicans an opening to torpedo it. Sen. Tom Coburn, R-Okla., announced a hold on Obama's nominee to head OPM until he got an answer on the exchange issue.

IRS under fire at health reform hearing

Republican lawmakers in the House on Thursday expressed concerns on the IRS' ability to enforce provisions of the Patient Protection and Affordable Care Act. At a hearing of the House Ways and Means Committee, Chairman David Camp (R-Mich.) warned that Americans are at risk of having their identity or taxpayer information leaked because of the law. But Danny Werfel, the acting head of the IRS, told lawmakers that the agency is taking the necessary steps to prevent such leaks from happening and there are “safeguards and procedures” in place to prevent it from happening.

So, there will be an income check

In response to concerns raised after the IRS said it wouldn't check income and employer-based insurance status when people apply for subsidized coverage through the state insurance exchanges, Gary Cohen, director of the CMS Center for Consumer Information and Insurance Oversight, told the House Ways and Means Committee on Thursday that the CMS will, in fact, check such information through new procedures it has come up with. “We're going to be sampling 100%,” he said.

Single-payer advocates have not given up

A new study (PDF) found that expanding Medicare to cover all Americans would save the government nearly $600 billion in one year.

The study found that a single-payer healthcare system based on the principles of legislation by Rep. John Conyers Jr. (D-Mich.), the Expanded and Improved Medicare for All Act, would save the federal government about $592 billion in one year.

The study was conducted by Gerald Friedman, a professor of economics at the University of Massachusetts, Amherst. Physicians for a National Health Program, which circulated the study, said that's more than enough to pay for comprehensive benefits for everyone at a reduced cost to taxpayers.

Obama threatens to veto bill to defund IRS ACA enforcement efforts

The White House on Wednesday issued a veto threat on a bill sponsored by House Republicans that would block the IRS from using funds to implement Obamacare. The legislation, H.R. 2009 (Prohibiting Treasury from Implementing the Affordable Care Act), is sponsored by Rep. Tom Price (R-Ga.) and has 141 co-sponsors.

Follow Jonathan Block on Twitter: @MHjblock


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