Insurers that seek to discourage high-cost customers from signing up for their Obamacare Marketplace plans may soon be dealt a blow by health care officials in California.
Covered California, the state-run health insurance marketplace set up by the Patient Protection and Affordable Care Act, is considering new rules that would require insurers to pay insurance agents commissions for all new customers, including the high-cost ones that insurers would prefer to avoid.
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The potential rule is a response to announcements by some insurers that they will not pay brokers commissions for customers who sign up for plans outside of the open enrollment period.
Insurers have complained that many customers who enroll through "special enrollment" periods cost more on average.
They have further suggested that some customers who sign up under special enrollment are abusing the process by waiting until they are in need of medical services to purchase insurance.
"When one health plan says during special enrollment, for instance, we won't pay commissions, they are hoping insurance agents won't sell them and they will sell sick people into another plan," Peter Lee, executive director of Covered California, told Kaiser Health News. "We aren't going to let the old games of risk selection happen under the Affordable Care Act."
Essentially, Lee is arguing that such actions by insurers amount to an end-around the PPACA's prohibition on discrimination by insurers against customers with pre-existing conditions.
Although no insurer has put in place a policy that explicitly prohibits any type of customer, their attempts to discourage certain customers produces a similar result.
So far it doesn't look like insurers are ready to fight over the issue, at least not publicly. But brokers are.
"If this issue isn't addressed, we're on a downward path to zero commissions," Michael Lujan, president of the California Association of Health Underwriters, told Kaiser. "There is a clear need for in-person assistance, and that is being threatened."
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