Each year since the launch of HealthCare.gov, insurance broker Craig Paulson faces a difficult question: Should he continue to sell individual market plans even though insurance companies increasingly refuse to pay commissions?
If his Utah-based insurance brokerage firm, Altura Benefits, stops selling exchange plans, consumers may be left with lower quality coverage or none at all. In the past year, Aetna announced it would stop paying any commissions on the individual market in Utah. Molina Healthcare later announced that it wouldn't pay for commissions on special enrollment plans.
“It's created a moral conflict,” Paulson said. “We want to do what's right for the client, but if you're not getting paid for your services, you can't remain in business.”
Paulson isn't alone in his dilemma. More insurance companies around the country are refusing to pay brokers commissions on higher-tier exchange plans or special enrollment sales as the companies face financial losses on the federal marketplace, according to Ronnell Nolan, CEO of Health Agents for America, which represents independent insurance brokers.
“It's the Wild West out here, and companies are doing what they can to survive,” Nolan said. “They're not paying commissions on platinum plans, and they are not paying them for special enrollment plans which cover some of the sickest patients.”
That policy has led to an exodus of brokers from the federal marketplace, which could undermine enrollment efforts since brokers historically sign up at least 50% of exchange enrollees, according to Kevin Counihan, the former CEO of HealthCare.gov under President Barack Obama.
Brokers help consumers navigate coverage options. Once they sign up, brokers tend to advocate for their customers if claims get denied. Between 2015 and 2017, there's been a nearly 35% drop in the number of registered brokers for HealthCare.gov, according to data from the CMS. The number dropped from more than 103,000 to just over 67,000.