Health insurance brokers and independent agents are ramping up marketing as states pare the Medicaid rolls for the first time in two-and-a-half years.
These salespeople will play a critical role helping former Medicaid beneficiaries enroll in alternate coverage, such as subsidized plans from the health insurance exchanges. About 3 million of the 15 million people projected to lose Medicaid benefits because they no longer qualify are expected to be eligible for subsidized exchange coverage, according to the Health and Human Services Department.
That's 3 million customers health insurance companies could gain, or at least retain in the case of carriers that administer Medicaid plans. Yet studies show that fewer than 5% of those who disenroll from Medicaid successfully convert to exchange coverage.
Independent agents are advertising on Facebook and in physician offices and are hosting events at churches and other community spaces to promote their services during this time, said Ronnell Nolan, president and CEO of Health Agents for America, a trade group for independent health insurance agents.
“It’s going to take a village, as they say, to help all these folks come off,” Nolan said. “What I’ve been telling our agents is: Encourage people to go into their Medicaid portal and update their information. So when they do get that pink letter in the mail, they know, ‘I need to call someone to get help.’”
Government agencies and health insurance companies themselves also are stepping in to provide transitional assistance to those losing Medicaid benefits after the expiration of a COVID-19 relief program that offered states extra federal Medicaid funding in exchange for them allowing enrollees to maintain coverage even when their incomes rose above eligibility levels.
Agents and brokers are receiving calls from consumers confused about the future of their health coverage and are spending hours reviewing prescriptions, providers and other personal information to find the best policies for them, Nolan said.
Customers who work with agents and brokers get advice at no cost because insurance companies compensate these professionals. Free assistance also is available from navigator organizations that receive funding from the federal government and state-run health insurance exchanges and do not have financial incentives to steer consumers toward any particular products or insurers.
But brokers and independent agents operate in communities across the country and have a key role to play during this period, Nolan said. “There’s no way that the navigator population can handle all these folks that possibly are going to come off of Medicaid and need to be enrolled into a marketplace or employer plan,” she said.
Navigators offer unbiased information about every coverage option available that conforms to the Affordable Care Act's standards. President Joe Biden and Congress allocated additional funding to undo cuts to the navigator program imposed under President Donald Trump. The Centers for Medicare and Medicaid Services subsequently distributed enough money to quadruple the number of navigators this year. The agency also notified Medicaid enrollees by mail that navigators are ready to help them, a spokesperson wrote in an email.
Although their expertise and widespread availability make brokers and independent agents valuable, consumer advocates are concerned they may advise people to purchase coverage that doesn't suit their needs, such as short-term, limited-duration plans with limited benefits and financial protection. The health insurance companies that sell such policies find them lucrative, and some offer brokers and agents higher commissions for signing up customers.
“These are profitable plans. You're collecting a premium without covering a lot of expensive benefits," said Kirsten Sloan, managing director for public policy at the American Cancer Society's Cancer Action Network.
Short-term plans, which can last up to a year, are generally cheaper than exchange plans. But they also aren't subject to federal rules such as those that require basic benefits and adequate provider networks. In addition, insurers can conduct underwriting on potential customers and either deny coverage or charge more based on preexisting conditions, which is not permitted for exchange policies or employer-sponsored insurance.
Twenty-five states ban short-term plans or limit them to three months so they serve their original purpose as gap coverage.
“We do know that those [short-term plans] are there and are reaching people, and we are trying to help advocates work on messaging to help people understand the difference,” said Miriam Delaney Heard, a senior attorney at the National Health Law Program and a former navigator. “On its face, people are losing coverage and those plans look cheaper. Inflation is hitting, and people are desperate for coverage. But there's a reason why they're offering that cheaply.”
The online brokerage eHealth made a push to boost short-term plan enrollment when the Trump administration allowed insurers to sell them in 2018. EHealth enrolled more than 100,000 people into short-term policies that year, which represented one-fifth of its sales volume. Short-term plans were second only to Medicare Advantage policies among eHealth customers that year. EHealth no longer discloses sales numbers for short-term plans.
Although eHealth continues to promote short-term plans, its salespople generally refer shoppers to policies that comply with the Affordable Care Act, said Anthony Lopez, vice president for individual and small business plans. Because its sales agents are salaried, they don't have a monetary reason to recommend any particular product, he said.
EHealth has experienced an uptick in inquiries from people concerned about losing Medicaid, Lopez said. Most have qualified for subsidized insurance, he said. If they're" coming off of Medicaid coverage, they had something that was traditional health insurance, so that's usually what we're going to transition them to,” he said.