ACA exchanges and private insurance brokers struggle financially

Almost half of Obamacare exchanges face financial struggles in the future

By Lena H. Sun and Niraj Chokshi
The Washington Post, May 1, 2015

Nearly half of the 17 insurance marketplaces set up by the states and the District under President Obama’s health law are struggling financially, presenting state officials with an unexpected and serious challenge five years after the passage of the landmark Affordable Care Act.

Many of the online exchanges are wrestling with surging costs, especially for balky technology and expensive customer call centers — and tepid enrollment numbers.

Most exchanges are independent or quasi-independent entities. For most, the main source of income is fees imposed on insurers, which typically are passed on to consumers.


Insurance Brokers in Calif., Other States Struggling Under ACA

California Healthline, May 4, 2015

Insurance brokers in California and other states have struggled financially since the passage of the Affordable Care Act.

In California, more than 12,600 insurance agents are certified to sell health plans through Covered California. Agents assisted 43% of individuals and families who signed up for coverage during the exchange's second open enrollment period.

Susie Fabrocini -- an insurance broker and owner of Reseda-based Great Life Financials -- said selling health insurance is becoming a less sustainable business under the ACA, in part because customers seek significantly more assistance.



By Don McCanne, MD

The insurance exchanges established under the Affordable Care Act function much like an insurance broker, adding additional administrative costs beyond the administrative costs of the insurers and the costs of the administrative burden placed on the health care professionals and institutions. Private insurance brokers in many states also may sell exchange plans, and, of course, they have their own overhead expenses.

Experience is showing that these additional administrative costs are significant, and the exchanges and brokers are struggling with those costs. The costs are then passed on to the purchasers of the health plans in the form of higher premiums. When the the health care system of the United States was already an outlier with outrageous administrative costs, it seems disingenuous that the reform design selected would add to that administrative burden.

With a single payer, improved Medicare for all, state and federal insurance exchanges and private insurance brokers would not be involved at all. Just as with our current Medicare program, enrollment would be a simple, once-in-a-lifetime process, efficiently accomplished at negligible cost by a government bureaucrat.

For those opposed to government bureaucrats, how could you pass up that kind of a discount?