Ario Seeks To Reassure Agents On Health Care Role Beyond 2014

FILE: Joel Ario, head of the insurance exchange bureau of the federal Department of Health and Human Services (HHS). (AP Photo/Susan Walsh) FILE: Joel Ario, head of the insurance exchange bureau of the federal Department of Health and Human Services (HHS). (AP Photo/Susan Walsh)

NU Online News Service, Feb. 16, 3:07 p.m. EST

The role that insurance agents play in the health marketplace in 2014 and beyond will likely be left up to the states, said Joel Ario, head of the insurance exchange bureau of the federal Department of Health and Human Services (HHS).

Consistent with comments made by Kathleen Sebelius, HHS secretary, on Tuesday before the Senate Finance Committee, Mr. Ario said HHS prefers that states manage the exchanges and that the federal government will step in “only if there is no alternative.”

Speaking at the annual Capitol Conference of the National Association of Health Underwriters (NAHU), Mr. Ario also promised that states will have flexibility in determining the role of agents in the “navigators” system—a component of the health care law that agents fear is designed to limit or eliminate their role in the health care system.

Mr. Ario said states will have significant flexibility to define exchange “navigators,” with each state likely to be given the authority to decide whether its navigators must be licensed.

“The intent of the navigators is not to replace agents,” Mr. Ario said, but to reach out to “hard-to-reach populations not currently served by agents.”

He explained that this market segment included the “less affluent who are going to get coverage through the exchanges.”

He added, “I don’t see a conflict between the agents and the navigators.”

In later comments, Susan Voss, Iowa insurance commissioner, appeared to imply that the states, too, envision a strong role in the exchanges for agents.

She did so by strongly endorsing agent involvement in marketing of all health insurance products, noting that state insurance departments “just don’t have the people to serve the consumer the way the agents do today.”

Mel Schlesinger, incoming NAHU president and an independent agent in Winston-Salem, N.C., said he took Mr. Ario’s remarks to indicate that HHS “is pretty open” to hearing what everyone’s views are and is also seeking to be “fair and impartial” in decisions regarding the future of the health care marketplace.

He also made clear the views of agents regarding the sensitive navigators’ issue.

“There are strong incentives for agents to go after the underserved population,” Mr. Schlesinger said.

In the past, agents did not seek out these potential customers because they could not afford coverage, he said. But, he added, “if there are going to be navigators, they still need to be licensed insurance agents. Even if the navigators are accessed through call centers, they should be licensed agents.”

He concluded, “If they are going to make recommendations to consumers, if they are going to understand the industry, why shouldn’t they be licensed?”

Also brought up at the NAHU meeting, Rep. Mike Rogers, R-Mich., said he will sponsor legislation in the coming weeks that would exempt health insurance agent commissions from the medical loss ratio formula.

Currently, the medical loss ratio formula requires that insurers pay agent commissions out of the 15- to 20 percent component of health care premiums reserved for administrative expenses. Insurance agents have argued that their commissions should not count toward administrative expenses.

In her comments, Ms. Voss said that agent commissions should be part of the 80- to 85 percent of premiums reserved for medical expenses.

She explained that commissions on the sale of health insurance policies “don’t go to the bottom line” of health insurers but are fees paid to health insurers only to reimburse agents for services they provide.


Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Union used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.