qotd: Insurers avoiding some of the sickest patients by using broker disincentives

Kaiser Health News
February 4, 2016
Licking Wounds, Insurers Accelerate Moves To Limit Health-Law Enrollment
By Jay Hancock

Stung by losses under the federal health law, major insurers are seeking
to sharply limit how policies are sold to individuals in ways that
consumer advocates say seem to discriminate against the sickest and
could hold down future enrollment.

In recent days Anthem, Aetna and Cigna, all among the top five health
insurers, told brokers they will stop paying them sales commissions to
sign up most customers who qualify for new coverage outside the normal
enrollment period, according to the companies and broker documents.

Last year, these special enrollment clients were much more
expensive than expected because lax enforcement allowed many who
didn't qualify to sign up, insurers said. Nearly a million
special-enrollment customers selected plans in the first half of 2015,
half of them after losing previous coverage.

In addition, Cigna and Humana, another big health insurer, have ceased
paying brokers to sell many higher-benefit gold marketplace plans
for individuals and families while continuing to pay commissions on
more-profitable, lower-benefit bronze plans, according to
documents and interviews.

Gold plans typically enroll sicker members than do less comprehensive
policies, say insurance experts. As of June, more than 695,000 people
had enrolled in gold plans.

But the retreat from broker sales, which includes last year's decision
by No. 1 carrier UnitedHealthcare to suspend almost any commissions for
such business, erodes a pillar of the health law: that insurers must
sell to all customers no matter how sick, consumer advocates say.

By inducing brokers to avoid high-cost members — whether in gold plans
or special enrollment — the moves limit access to coverage and
discriminate against those with greater medical needs, said Timothy
Jost, a law professor at Washington and Lee University and an authority
on the health law.

The only explanation I can see for them doing this is risk
avoidance — and that is discriminatory marketing and not permitted,
he said. When people wonder why we're not getting millions more
enrollees in Affordable Care Act health plans, one reason is, the
carriers are discouraging it.

The insurance industry says it is not discriminating but adjusting to
market realities including higher-than-expected medical claims and the
failure of a government risk-adjustment program called risk
corridors to cover much of that cost.

Without making necessary changes to coverage and benefits, there was
no way for health plans to remain in the market or to offer the kind of
coverage as they had in the past without sustaining huge losses, said
Clare Krusing, spokeswoman for America's Health Insurance Plans, an
industry lobby.

The nonpartisan Congressional Budget Office estimated as recently as
last March that 21 million consumers would be enrolled by now in private
health insurance plans sold through online marketplaces. Now CBO
forecasts 13 million will sign up this year.

Brokers are critical to sign-ups and the success of the health law. For
2014, 44 percent of Kentucky enrollees bought through brokers. So did 39
percent of the California enrollees. No similar figures are available
for the marketplace that serves most states, healthcare.gov
<http://healthcare.gov>.

With varying commissions, brokers will be tempted to promote only plans
they make money on, even if those aren't the best for some customers,
said John Jaggi, an Illinois broker and consultant.

Now they're really forcing the agent to think only of the plan that
he gets compensated for, he said.

http://khn.org/news/licking-wounds-insurers-accelerate-moves-to-limit-health-law-enrollment/

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Comment by Don McCanne

No matter what legislation, regulations, rules or advisories our
government produces, the private insurance industry will always find
ways to skirt the intent of this oversight in order to maximize their
business goals, usually at a cost to patients and public and private
payers. The current efforts of insurers to manipulate the brokers are a
prime example of how they will continue to work the system to advance
their own interests.

As the Affordable Care Act was being crafted and then implemented, there
was a push to include brokers as intermediaries who would provide
customer access to the exchange plans. The argument was that brokers
were highly qualified to provide guidance on what the best plans would
be for their clients. But little was said about how insurers might
 find ways to use the brokers to to their own advantage.

As this article shows, insurers can heavily influence broker behavior
through the commissions they grant. The insurers found that people who
were signed up during special enrollment periods had greater health care
needs and also were more likely to drop out after their needs were
met. That's easy. The insurers stopped paying commissions for most of
the plans sold during these special enrollment periods. Also, people
enrolling in gold plans, with their higher actuarial values (covered
more of the costs), were also using more health care. Again, no problem.
Many insurers quit paying commissions for gold plans but continued to
pay them for lower actuarial value plans that required patients to pick
up more of the costs of health care. Will the broker sell plans without
a commission, when an insurer offers a commission for selling their more
profitable plans?

Discrimination in the offering of private insurance plans is prohibited,
but AHIP - the insurance lobby - says that insurers are not
discriminating but rather are merely adjusting to market realities.
Clare Krusing - AHIP's spokesperson - said that there was no way to
offer the kind of coverage as they had in the past (gold or platinum
plans) without sustaining huge losses. It really is about profits,
not patients.

And now many politicians and progressive pundits are telling us to build
on Obamacare. Forget about single payer because it will never, ever
come to pass. Instead let's control costs through higher
deductibles and other cost sharing, narrower networks, greater
administrative hassles through ACOs and EHRs that keep professionals
from tending to their patients, more opaque obstructions that keep
sicker patients out of the private plans, more managed care that reduces
access, especially to specialized services, *** **** ****, ***** **
****, and ** ****** *****.

And those asterisks? They are the hidden future policies of the insurers
that will further enhance their business models - policies that we
can't even conceive of since they can only be conjured up by the
nefarious minds that are currently in control of our health care
financing system. Do we really have to have a health care future that
will eventually reveal to us what is behind the magic asterisks? Or
shall we tell them on their way out the door where to put their
asterisks, as we take over and set up our own single payer national
health program?