Healthcare economist Uwe Reinhardt writes in a new column that health insurance agents and brokers might thrive under health reform despite much hand wringing within the industry.
The column comes in response to recent arguments that the new law's health exchanges will simplify the purchase of insurance to such a degree that brokers will become irrelevant, much like online flight ticketing bankrupted travel agents. Brokers say their predicament is worsened by the law's medical-loss ratio requirements that will encourage health plans to stop paying broker commissions and instead spend more on care.
"If I were a broker..." Reinhardt writes on The New York Times' Economix blog, "I would not despair at the prospect of the state-based insurance exchanges for one simple reason: administrative simplicity and efficiency is decidedly not America's strong suit, in either the private or the public health sectors.
"So it's a pretty safe bet that the state-based exchanges envisaged in the Affordable Care Act will be so complicated and bewildering that the services of brokers will still be needed. In fact, the Affordable Care Act anticipates this by requiring that the exchanges award grants to 'navigators,' tasked with educating the public about qualified plans, available subsidies, enrollment procedures and so on."