Does everyone have to play on an even playing field? As Insurance Professionals will tell you, the only advantage each of them has is the services and knowledge to provide to the client. Now, what if one broker was allowed an absolutely unfair advantage? Would that be acceptable?
Insurance Professionals in the health arena are beginning to see unfair and dangerous trends develop especially when it comes to the Marketplace. When the Marketplace was first introduced, it was only going to be a solution to a perceived problem where individuals could compare and apply for coverage. Insurance Professionals were allowed to assist their clients and receive compensation for the work they did. We now see trends where carriers are not paying compensation for policies issued through the Marketplace during special enrollment periods. The carriers argue that the claims from these special enrollment individuals are overwhelming. One reason for these special enrollments being so prevalent is the fact that although we have an open enrollment period, there are numerous exceptions. What should have been simple special enrollment situations, has now become open enrollment year round.
Let me provide an example of a case we recently had in our office. An individual was referred by an OCI broker and wanted to obtain health coverage. In discussion with the prospect, they explained that they had just been diagnosed with cancer and were looking for coverage. In the following questioning by the agent, it was learned that not only had they not had any health coverage in the past, but there were no special enrollment exceptions that this individual qualified for. No prior coverage lost, no qualifying life event, no reason that the person could obtain coverage other than the fact they were going to need it for future care. Knowing that we could not assist them, we suggested that they contact the Marketplace directly and then give us a call and let us know the outcome. The individual contacted the Marketplace and magically, they were able to obtain coverage. So the Insurance Professional in this case, followed the rules so as to not harm the integrity of the open enrollment period and yet, the Marketplace need not adhere to the same rules. You want to know why we are seeing and will continue to see adverse selection, this is exactly what the carriers were afraid of. If I can obtain coverage after I find that I need it, why would I purchase it when I am healthy or during open enrollment? The Marketplace needs to play by the same rules that Insurance Professionals are held to.
The carriers could continue to pay appropriate commissions to Insurance Professionals if this adverse selection was eliminated. Insurance Professionals not only protect their clients but also work to protect the carriers from risks that they should not be accepting. It is time to address this situation before we see more people decide to only purchase “insurance” when they know a claim is imminent.
By the way, premiums are not less when an Insurance Professional is taken out of the equation.