qotd: ACA exchanges and private insurance brokers struggle financially

The Washington Post
May 1, 2015
Almost half of Obamacare exchanges face financial struggles in the future
By Lena H. Sun and Niraj Chokshi

Nearly half of the 17 insurance marketplaces set up by the states and
the District under President Obama's health law are struggling
financially, presenting state officials with an unexpected and serious
challenge five years after the passage of the landmark Affordable Care Act.

Many of the online exchanges are wrestling with surging costs,
especially for balky technology and expensive customer call centers —
and tepid enrollment numbers.

Most exchanges are independent or quasi-independent entities. For most,
the main source of income is fees imposed on insurers, which typically
are passed on to consumers.

http://www.washingtonpost.com/national/health-science/almost-half-of-obamacare-exchanges-are-struggling-over-their-future/2015/05/01/f32eeea2-ea03-11e4-aae1-d642717d8afa_story.html

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California Healthline
May 4, 2015
Insurance Brokers in Calif., Other States Struggling Under ACA

Insurance brokers in California and other states have struggled
financially since the passage of the Affordable Care Act.

In California, more than 12,600 insurance agents are certified to sell
health plans through Covered California. Agents assisted 43% of
individuals and families who signed up for coverage during the
exchange's second open enrollment period.

Susie Fabrocini -- an insurance broker and owner of Reseda-based Great
Life Financials -- said selling health insurance is becoming a less
sustainable business under the ACA, in part because customers seek
significantly more assistance.

http://www.californiahealthline.org/articles/2015/5/4/insurance-brokers-in-calif-other-states-struggling-under-aca

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Comment by Don McCanne

The insurance exchanges established under the Affordable Care Act
function much like an insurance broker, adding additional administrative
costs beyond the administrative costs of the insurers and the costs of
the administrative burden placed on the health care professionals and
institutions. Private insurance brokers in many states also may sell
exchange plans, and, of course, they have their own overhead expenses.

Experience is showing that these additional administrative costs are
significant, and the exchanges and brokers are struggling with those
costs. The costs are then passed on to the purchasers of the health
plans in the form of higher premiums. When the the health care system of
the United States was already an outlier with outrageous administrative
costs, it seems disingenuous that the reform design selected would add
to that administrative burden.

With a single payer, improved Medicare for all, state and federal
insurance exchanges and private insurance brokers would not be involved
at all. Just as with our current Medicare program, enrollment would be a
simple, once-in-a-lifetime process, efficiently accomplished at
negligible cost by a government bureaucrat.

For those opposed to government bureaucrats, how could you pass up that
kind of a discount?