Health Brokers See Individual Markets Stabilize, But Short-Term Plans Pose Risks

New research shows certain insurance brokers refused to sell what they said were riskier, non-Affordable Care Act-compliant products to consumers, including short-term health plans, despite the higher compensation they could earn. Short-term health plans do not provide comprehensive coverage like health plans sold on the Affordable Care Act marketplaces.

A Georgetown University Center on Health Insurance Reforms and Urban Institute analysis based on interviews with insurance brokers—with funding from the Robert Wood Johnson Foundation—found brokers were concerned about ACA marketplace policies’ increasing out-of-pocket costs and narrow provider networks. Brokers were pleased with the marketplace’s recent premium stability and increased plan offerings.

“Brokers report that conditions in the individual market have improved in recent years, with more choices and sometimes lower premiums,” said Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation. “Affordability is still a challenge for many, and it remains to be seen what will happen to individual market enrollment when millions are losing jobs and income.”

The analysis looked at insurer participation, premiums, enrollment, and other data in Colorado, Georgia, Iowa, Mississippi, New Hampshire, Texas, and Utah. The states were chosen based on geographic diversity and because they had all experienced recent individual market instability or policy changes.

Health insurance brokers sell almost half of all ACA marketplace policies, as well as many non-ACA-compliant products, such as short-term plans. As changes in federal and state policy have caused turmoil in the individual health insurance market over the past years, brokers shared their insight on the impact of policy changes on consumers’ health insurance experiences.

Across the seven study states, the individual market appears to be stabilizing. However, brokers are concerned about ACA marketplace policies’ increasing out-of-pocket costs, which they attributed to expensive premiums and so-called “narrow networks,” which require consumers to pay more for care provided out-of-network. Brokers say:

• Premium affordability remains a top concern for enrollees.
• Incentives to serve individual market consumers have improved, with more generous compensation awarded for selling short-term plans.
• The marketplace’s recent stability and increased plan offerings are good for consumers.
  While many brokers applaud signs of stabilizing and healthier markets, there is still concern about premiums being unaffordable for consumers. Despite the higher commission some plans offer, many brokers refuse to sell products viewed as overly risky for consumers like short-term health plans or association health plans.