END OF 2018 OPEN ENROLLMENT PERIOD (42 states)

Time: D H M S

UPDATED: What's going on with WBEs?

I noted a few weeks ago that there appears to be a "war on broker commissions" going on in the individual insurance policy market. First, UnitedHealthcare announced up to 80% cuts on broker commissions, along with deliberately crippling/removing helpful tools for their brokers. Then a few other carriers decided to scrap their commissions outright.

Since then, there's been some further developments: First, UnitedHealthcare has decided to stop pretending and is killing off commissions completely:

United’s new corporate policy, emailed to insurance agents Friday, will go into effect Jan. 1 in North Carolina and most of the two dozen states where United sells ACA coverage. That means that thousands of insurance agents nationwide won’t be paid for enrolling customers in ACA policies, a process that can require several hours of consultation to compare out-of-pocket costs, drug prices and provider networks between multiple health plans.

Agents who sold a heavy volume of United policies will lose thousands of dollars a year in commissions. The surprise announcement comes on the heels of a previous decision, announced three weeks ago, to slash agent sales commissions from as high as 10 percent to 2 percent, a move that agents decried at the time as an 80-percent pay cut.

“The only time I’ve seen this before is when insurers are required by government to sell a product they do not particularly want to sell,” said Wake Forest University law professor Mark Hall. “Here, this seems consistent with an insurer that no longer wants to sell through the exchanges ... but is not allowed to withdraw immediately, so it’s pushing its commissions to zero until it’s allowed to exit.”

Agents say United’s decision puts them in an bind because they will have no incentive to steer customers to United plans, even if those plans are the best choices. Several agents said Monday that United offers some of the best-priced plans in North Carolina, where it operates in 77 counties.

I should also note that UHCs latest announcement kills QHP commissions for off-exchange enrollments as well as exchange-based ones.

In addition, brand-new "hot startup" broker Oscar is slashing their commission rates in half as well:

Oscar became the most recent health insurer to slash the commissions it pays to brokers. The Manhattan startup last month sent a letter notifying brokers that rates would be more than halved starting in February.

Oscar had planned to pay brokers $14 per contract each month for individual subscribers and up to $26 for enrolled families. Instead, all policies Oscar received after Nov. 6 will generate only $6 a contract per month regardless number of people in the plan, according to the letter.

Many former enrollees of collapsed insurer Health Republic of New York have turned to Oscar. Its growing market share only compounds the squeeze on commissions for brokers. Jason Samel, owner of JayMar Insurance Agency in Glen Cove, L.I., said that out of several hundred people he helped sign up for health coverage, about 80% chose Oscar, including many former Health Republic members.

"For [Oscar] to turn around just after open enrollment began, it has killed me," he said.

OK, so it looks like insurance broker commissions are on the way out, right? Well, it seems there's been another development. I can't reveal my source for this, but it's interesting if true (edited only for typos, clarity and to both protect the identity of my source as well as avoid any potential libel claims (?); emphasis mine):

Last Friday, HealthSherpa received a letter from CMS/HHS requiring them to change their FFM enrollment process. Healthsherpa is a Web Broker Entity, authorized to connect to the FFM to facilitate enrollments.

Reminder: "FFM" = "Federally Facilitated Marketplace", otherwise known as HealthCare.Gov. "WBE" or Web Broker Entity basically refers to private online brokerages such as eHealthInsurance, GoHealth and the like, as well as HealthSherpa, of course.

As additional backstory, Healthsherpa was the 1st and the best WBE to "get it right" and truly make FFM enrollment easy for everyone. I have always had the impression that they were in very good graces with CMS/HHS, as last year, some of their WBE competitors questioned their lack of an "exposed double redirect" during the enrollment process....One particular WBE that publicly questioned the HS process/code, finally developed their own method of enrolling similar to HealthSherpa. That particular WBE did not receive a letter from CMS/HHS last Friday. I am hesitant to name that WBE, as we (the broker community) really NEED a quick method to enroll - especially this year with the many Co-Op shutdowns, plan changes, etc.

On Wednesday of this week HealthSherpa switched back over to the "archaic" enrollment flow, requiring logging in to the FFM to complete enrollment. I have been told, but cannot confirm, that GoHealth/eHealth also changed their enrollment process as well. I have heard that it was voluntary by GoHealth, and no letter was received, but cannot confirm. At the end of the day, I know firsthand that not every WBE received a letter, Healthsherpa seems to have been targeted.

Why does this matter? HealthSherpa is the enrollment platform of choice for many high volume large agencies and call centers that operate in mutiple states. They have been a bit of a success story of the ACA - a couple of techy ivy leauge guys that started in an apartment and managed to accomplish what NO ONE was able to do in the begining of the ACA - fast quotes and enrollment without the hassle surrounding the FFM.

So why did CMS/HHS single out Healthsherpa over the holidays, in the middle of OEP? Customer complaints? I doubt it. The timing for that would make more sense around tax time, IMHO. Yesterday Unitedhealthcare annoumced 0% commissions on almost all ACA QHP business -on and off marketplace.

UHC is bleeding, and I imagine threatened by Aetna/Humana. UHC has a national footprint in the ACA market and...is a go-to carrier for many large insurance agencies/call center operations.

OK, I'm in over my head here, but if everything stated here is accurate, it sounds to me as though the implication is that UHC may be pressuring CMS to make it harder for other carriers to accept broker-assisted enrollments. Basically, "I can't make money with broker-assisted enrollees, so I don't want anyone else to be able to do so either!" I'm not sure how much sense that would make, or how it would be helpful to UHC (after all, if broker-assisted enrollments are such a big loss leader, shouldn't they welcome everyone else continuing to do so?), but I might not be thinking it through properly.

Anyway, it's an interesting twist to an already developing story, so I'm throwing it out there. Anyone have any additional confirmation (or refutation) of these claims?

UPDATE: I've removed the statement claiming that HealthSherpa's specific process was "approved" by CMS; they say only that they have a WBE agreement with CMS. My apologies for the error.

UPDATE 12/10/15: Hmmm...OK, I'm now informed that HealthSherpa's "quick" process is operational again, just a few days after being dropped. Apparently this is an Emily Litella moment..."Never Mind..."