In October 2010, then-California Gov. Arnold Schwarzenegger authorized the establishment of a state health insurance exchange pursuant to the mandate laid out in PPACA. While California was the first state in the nation to take such action, it certainly won't be the last – which is why it's advisable that brokers and agents heed this call and begin to establish themselves as exchange experts.
Health care reform mandates that every state establish a health insurance exchange by Jan. 1, 2014, or default to a federal "fallback" program. Exchanges are designed to promote choice and make health insurance purchases more value-based by allowing an individual or small business to compare the costs and benefits of various health plans and benefit options. The mandate is designed so that, with such information in hand, buyers will be able to better select a health plan that fits their needs and budget.
Exchanges make sense because they create more efficient markets and offer the opportunity to effectively extend coverage to the uninsured. But what do exchanges mean to health insurance agents, and what will they need in order to be successful?
The short answer is that health insurance exchanges signal incredible new opportunities for producers – opportunities for new sales, opportunities for new clients, and opportunities to position themselves as leaders in this new arena. But with these opportunities will come some new challenges.
While state exchanges can use agents, they will in all likelihood also be sold directly through an undefined network of "navigators." So why would an individual or business owner use a broker when they could go straight to the exchange itself? The answer is exactly the same as to why an employer uses a broker today – because more than anyone else, the broker can provide the unbiased information and superior service purchasers need to make well-informed decisions.
