3rd Party Web Broker enrolls over 14% of all HC.gov enrollees for 2020

DISCLAIMER: HealthSherpa has a banner ad placement agreement with ACASignups.net.

As regular readers know, for the past two Open Enrollment Periods, I've had a banner ad agreement with HealthSherpa, a 3rd-party Web Broker which enrolls people in ACA exchange policies. It's important to understand that unlike some other web brokers which sell ACA policies alongside non-ACA compliant plans, I only entered into this agreement with HS because they only offer on-exchange ACA-compliant policies. And no, I'm not being paid extra for this blog post; I don't work that way.

Having said that, there's no denying that their press release today is intriguing and an important look at the public/private status of the ACA:

HealthSherpa enrolls over 1 million Americans during Open Enrollment Period

• Enrollment more than doubled compared to 2019

With the close of the open enrollment period in the 38 states using the federal health insurance Marketplace, HealthSherpa announced its 2020 open enrollment results.

Between November 1st and December 17th, 2019, HealthSherpa enrolled 1.2 Million people in ACA coverage - a 143% increase over the prior Open Enrollment period. Over 31,000 of these enrollees were able to take advantage of the deadline extension granted by the Centers for Medicare and Medicaid Services. In total, HealthSherpa accounted for over 14% of ACA enrollments across the 38 Federal Marketplace states.

The rest of the press release goes into additional details, but to me, this is by far the most eye-opening statistic. Even if they didn't enroll anyone in the 13 states not hosted by HC.gov (I assume the percentages in those states is lower), that's still a huge number of people enrolled in on-exchange ACA plans via a privately operated ACA website.

Whether you see this as a good or bad thing obviously depends on your perspective. 

Last year, Tara Straw of the Center on Budget & Policy Priorities posted an extensive analysis of things to look out for with "Enhanced Direct Enrollment" brokers...

Many DE entities offer plans that don’t comply with ACA standards, and they may benefit financially if they enroll more people in them. Some insurers and brokers operating through DE offer short-term health plans and other types of plans that don’t meet ACA consumer protections and benefit standards but pay high commissions to agents and brokers. Federal rules bar DE entities from displaying these plans alongside marketplace plans, but some DE sites use screening tools to shift consumers away from marketplace options. This raises a serious threat to both consumers and the ACA marketplace if insurers and brokers use their status as approved DE entities to enroll consumers in non-compliant plans. Also, the sites’ screening tools collect personal and health information that can be used for future marketing of non-compliant plans.

...People who are eligible for Medicaid or other programs may face additional barriers to enrolling when they rely on a DE website. The marketplace has a “no wrong door” policy, meaning that consumers who go to the marketplace website can fill out one application and be routed to Medicaid, CHIP, or marketplace subsidies based on the information they provide. But some DE websites divert consumers from the marketplace application process before they even reach it, by not informing them that they might be eligible for no-cost coverage or by steering them toward non-ACA products.

...DE websites prevent consumers from fully comparing private health plans based on price and quality, which impedes competition among insurers. Unlike marketplace websites, which allow people to compare all qualified health plans on an apples-to-apples basis, DE entity websites may not present all available marketplace plans or comparable plan information. Moreover, DE entities may have financial incentives to steer consumers to certain insurers. Consumers thus may not end up with the plan that would best meet their needs. Moreover, insurers with significant market share can use DE and EDE to maintain their dominance, making it harder for small insurers or new entrants to compete.

The good news is that HS does not have these issues, as Sraw herself notes:

Consumers are likely to be confused by their plan options. For Duval County, Florida, for example, eHealth displays what it calls “17 of 17 plans.” (See Figure 5.) Consumers may assume this is a complete list of their options, but listed in plain text at the bottom of the screen are 32 additional plans from Florida Blue, all without the premium or cost-sharing information needed to make a meaningful comparison. The same consumer could go to Florida Blue’s website and find pricing for those plans, 15 of which are cheaper than the lowest-cost plan on eHealth but not even a plain-text listing of the competing plans. A trip to Health Sherpa (www.healthsherpa.com) would list all 49 plans, as HealthCare.gov does. Without visiting multiple websites, consumers would have difficulty finding and comparing their plan options; they won’t know what financial considerations drive web brokers to preference some plans over others, and some could mistakenly assume the distinctions reflect the plans’ relative quality. This is the type of fractured shopping experience the marketplace is designed to remedy.

This, along with the fact that I've gotten to know several of the folks at HS personally, is why they run an ad on the site during open enrollment.

In any event, whether you approve or not, 3rd party brokers are clearly taking on a larger role in ACA enrollment, and that looks likely to continue going forward...assuming the ACA itself isn't struck down by the Texas Fold'em lawsuit, of course.

Most HealthSherpa consumers found coverage for $47/month or less, and 72% enrolled in silver plans, which offer comparable coverage to employer-sponsored health insurance. In aggregate, HealthSherpa has enrolled over 3 million Americans in on-exchange health insurance since 2014.

HealthSherpa is one of a handful of companies approved to use the Department of Health and Human Services’ innovative new Enhanced Direct Enrollment (EDE) technology, and was the first company granted approval on December 4th, 2018. In the 2020 Open Enrollment Period, HealthSherpa hosted the EDE platform for 37,000 insurance agents and over 15 insurance carriers.

EDE permits private companies to carry out all enrollment and related activities for on-exchange health coverage. HealthSherpa is approved for Phase 3, which allows HealthSherpa to process all applications, including those for rare tax circumstances, end-to-end on HealthSherpa.com.

“Continued strong enrollment year over year shows that consumers and issuers alike are deeply invested in the ACA Marketplace,” said HealthSherpa CEO George Kalogeropoulos. “Technologies like Enhanced Direct Enrollment are making it easier than ever for issuers, agents, employers, and other stakeholders to help Americans enroll in comprehensive coverage, and to help them manage that coverage throughout the year. We are proud to be at the forefront of ACA enrollment and to have the privilege of helping millions of Americans access the peace of mind that can only come with high-quality, ACA-compliant coverage.”

About HealthSherpa
HealthSherpa partners with large employers, insurers, as well as insurance agencies and agents to support consumers searching for, enrolling in and utilizing high quality, affordable health insurance coverage. HealthSherpa only sells ACA marketplace plans, which have built-in consumer protections, and since its founding in 2014, has enrolled over 3 million Americans in Affordable Care Act coverage. For more information, visit http://www.healthsherpa.com.