Web Brokers Win a Major HealthCare.gov War

If the Affordable Care Act public exchange system survives Republican efforts to change the ACA, private health insurance agents and brokers may get to play a much bigger role in selling exchange plan coverage.

President Donald Trump's Centers for Medicare & Medicaid Services says it will let web broker entities that meet CMS data security standards collect HealthCare.gov enrollment information from consumers and enroll consumers directly in exchange plan coverage, and the ACA premium tax credit subsidy program, without passing the consumers on to a separate HealthCare.gov enrollment system.

The Center for Consumer Information & Insurance Oversight, the CMS unit that manages HealthCare.gov, announced the new policy today, in a new batch of guidance. CCIIO officials hope to make direct enrollment available for the upcoming 2018 ACA open enrollment period, which is set to start Nov. 1 and end Dec. 15. The enrollment period would be the first to start since Trump took office.

To offer direct enrollment, a web broker entity would have to comply with CMS consumer notice rules and other rules. CMS would have the authority to suspend a web broker entity that appeared to be violating direct enrollment program rules at any time.

The new CMS guidance would have a direct effect only on firms that work with HealthCare.gov, and only on firms that have registered as web broker entities with HealthCare.gov.

The guidance could have a much broader indirect impact. Retail agents and brokers compete head to head with web brokers on many occasions, but, on other occasions, they use the web broker entities' systems to sign clients up for HealthCare.gov coverage.

Drafters of the ACA created the public exchange system to give consumers a way to shop for health coverage on an apples-to-apples basis, and to get ACA premium tax credit subsidies.

Some states run their own ACA exchange programs. The U.S. Department of Health and Human Services, the parent of CMS, set up HealthCare.gov to provide public exchange enrollment and account administration services in states that are unable or unwilling to do the job. HealthCare.gov now handles individual exchange plan enrollment for 39 states.

HealthCare.gov has been giving the companies that register for its web broker entity program some ability to connect to HealthCare.gov systems, but the web broker entities have been fighting for the ability to enroll consumers directly in HealthCare.gov exchange plans since before the system came to life, in October 2013.

Scott Flanders, the chief executive officer of eHealth Inc., put out a statement celebrating the new CMS guidance.

"We'll be reviewing the guidance with CMS to clarify specific details, but we're enthusiastic about the change of direction," Flanders says in the statement.

Flanders' company is the parent of eHealthInsurance.com, the oldest web-based health insurance supermarket. The creators of the ACA public exchange system copied eHealthInsurance.com, then kept eHealthInsurance.com from capturing much of the new individual major medical sales traffic the ACA created.

Jeff Smedsrud, the co-founder of HealthCare.com, says in another statement that the HealthCare.gov policy change could improve the quality of the individual major medical market, by making buying health coverage online quicker and easier.

"Because enrollment will be quicker, those who want, but don't need, health insurance will be more likely to buy," Smedsrud says.

That shift could increase sales to young, healthy consumers, Smedsrud says.

— Read On the Third Hand: Controlled Demolition on ThinkAdvisor.