The Governments Assault on the Health Insurance Agent
By Joe Steck – Mankato Times
Is the Affordable Care Act (ACA) in general and MNsure in particular really about covering the uninsured in Minnesota?
Was the demise of the health insurance agent profession an intended consequence of this law?
Before you start thinking about your disdain for insurance companies, let’s set the record straight. Insurance Agents are not Insurance Companies!
“We are not insurance companies, we are agents. We don’t represent insurance companies, but our clients for whom we serve,” Said Professional Insurance Agent Chris Schneeman “Insurance companies try and avoid risk, and agents try and place risk.”
Schneeman is the President of Seven Hills Benefit Partners, a locally owned, independent firm located in St. Paul, MN.
“An insurance agent does not get paid until a policy is placed,” said Schneeman “So it has been disturbing for agents for generations that insurance companies would refuse our request to insure somebody.”
Before the passage of the ACA, 91%-93% of all Minnesotans were insured (MCHA). Everyone had the opportunity to have health insurance, either through their work, the government, individual insurance companies or through the Minnesota Comprehensive Health Association (MCHA).
“People who were turned down for health insurance in the private marketplace because they had a pre-existing health problem could enroll in MCHA,” said Chad Ostermann “The only time people in Minnesota didn’t have coverage is when they did not want to pay for it.”
Ostermann is a Health Insurance Agent with M & M Insurance Agency, LLC in Mapleton, MN and President of the National Association of Insurance and Financial Advisors (NAIFA) South Central Minnesota.
On October 31, 2011, Governor Mark Dayton issued an executive order to “design and develop” a health insurance exchange in compliance with the ACA. The executive order was in response to the refusal of the 2011 Minnesota legislature to pass a state law creating an Exchange. With that order, Governor Dayton formed a monopoly.
It was not until the Democrats took full control of the Minnesota House, Senate and Governors office before a health exchange bill was passed strictly on party lines.
The exchange is meant to show people what options they have to buy subsidized health insurance. It is the only place in Minnesota where people can get a subsidy on their health insurance.
Insurance agents, if properly licensed and registered with the State, can help people sign up for their subsidy through the MNsure exchange. It is rare to hear these professionals touted as a vendor for people to turn to. It is always about signing up through MNsure using their web site, call center or Navigators.
When Governor Dayton signed the Health Insurance Exchange Bill on March 20, 2013, he proudly exclaimed “Our state must move forward to build an exchange by Minnesotan’s for Minnesotan’s.” Dayton also said “I’ll be judged by the quality of the appointments I make.”
Instead of building our own exchange, the state of Minnesota hired the same vendors, the same consultants and now have the same software and technology that the Federal government bought. When we took the federal money, they in turn told us how we would build the exchange.
We were falsely led to believe that we could build the exchange the way we wanted to build it. In reality, the feds were building the exchange all along, we just plugged it in. Minnesota has the same problems as the federal site, because we have the same technology.
When you look at the federal web site, it looks almost exactly the same as Minnesota’s with the only real difference being Paul Bunyan.
Another consequence to MNsure is that Governor Dayton and the Democrats formed a monopoly on subsidies. If you do not go through MNsure, you do not get a subsidy.
When it came to designing MNsure, there were certain elements, including SEIU, ASCME and other liberal groups, who lobbied to keep insurance agents from being involved in the process. They wanted to build something based off of their view of how the market works.
You can go to the University of Minnesota and many other college campuses in Minnesota and hear Professors proclaiming that you can eliminate 5% of the costs of insurance by eliminating the insurance agent.
“The problem with theorists is they think that people just click, click on something and you are done,” said Scheneeman “That does not work in the real world. You only have a good pool if you have agents going out selling to everyone. Healthy people need insurance sold to them too.”
In order for the ACA to work, there has to be a large number of healthy people becoming insured to cover the losses of sick people. The combined group of insured are called a pool.
“If you are sick, you go out and call an agent,” Scheneeman said “If you are healthy, the agent sells you a policy.”
Young people are in general more healthy then older people and so far, the current median age of a MNsure enrollee is 50.
MNsure’s new chief executive officer, Scott Leitz, was quoted in a Star Tribune article saying “One of the important things about MNsure is getting young, healthy folks in so that they have coverage and that they’re part of the broader risk pool.”
It appears that the theory that healthy people would line up for miles to sign up for MNsure belong in the classroom and not in real world.
What they forgot is that people do not buy health insurance; it is sold to them by the very people the exchange is cutting out, the insurance professional.
With the dilemma of getting a larger pool of insured, one would think that MNsure would want the help of trained professional health insurance agents to be working with them.
Why are Governor Mark Dayton, the MNsure leadership and the Minnesota Democrats deciding to steer the consumer away from the Insurance agent when they need more people in the insurance pool?
You have to wonder why the Health Insurance Agent would even try to work with Governor Dayton and MNsure after they have been treated so poorly.
“You are dealing with a group of people (the agent) who are highly motivated to help people for two huge reasons,” Schneeman said “first, that is how insurance agents make their money, buy selling a product, and two, the insurance agent knows people and wants to help people.”
That is why at least 1500 agents enrolled and took all the certification classes this summer with NO information about how or what the process would be like to sell within the exchange. The agent’s did not even know if the class would be worth their time or if they would be paid. The 1500 number comes from the number of agents who had their social security numbers released by MNsure as part of a data breech.
Besides signing up blindly to sell MNsure, the agents tried to give good recommendations to Governor Dayton and the MNsure staff on how to make the new law work. Former MNsure Executive Director April Todd-Malmlov was in on the meetings, but did little to comply with the most sensible recommendations from the Insurance agents.
“The number one recommendation was for there to be a place to put an agents name or a navigators name on an application so there could be a warm hand-off between people for a customer,” said Scheneeman “April Todd-Malmlov said yes to this recommendation during a meeting, and here we are a year later and that isn’t in the exchange.”
A warm handoff gives an insurance agent the ability to talk with an insurance company and be an advocate on behalf of a customer. Without this, they can’t help.
The process to help a customer relies on authorization to assist a customer. When the agent is listed, (the insurance carriers call this a business associate agreement which means they can share confidential information with each other) the agent is then allowed to correspond, assist and advocate for the client. If there is no listing, the agents, hands are tied.
It was highly recommended by a work group, in fact, the number one recommendation, to give the agent and the navigator the ability to be listed yet it was completely ignored by the MNsure exchange.
Why is this important?
Approximately 90% of people that are uninsured are in transition, be it through changing jobs, COBRA or moving and that person needs to be handed off so an agent can help them.
“It is more then the agent won’t get paid, the agent can’t even help you.” Said Ostermann “This whole exchange process could have worked well but the insurance agent was left out and ignored. We are not being treated as professionals.”
When you look through the MNsure Board of Directors and the MNsure community staff you will find software developers, AFSCME representatives, people who have worked in public affairs, worksite wellness programs, social workers, community organizers, and health education advocates, but no Health Insurance Agent.
One could question if these people were put in the positions as political favors rather than for their professional expertise, unless they forgot to list their backgrounds in insurance sales.
Initially, MNsure wanted to have all pay go through them. If you helped someone enroll in a product, the insurance company would pay MNsure, and then MNsure would pay the insurance agent.
MNsure tried hard to convince the insurance agents to accept this arrangement by saying that they have every insurance carrier and the agent would automatically be appointed with those carriers and could sell every product.
The agents collectively said “We don’t want that deal.”
In order to sell an insurance product, an agent must be appointed by the insurance company. It is a fairly easy process to get appointed by an insurance company.
The agents trust the competitive fight with the insurance carriers more then they trust the monopoly that the government created. If they have a problem with Blue Cross, the agent will take their business to another carrier.
Instead of being a tool for agents to help people, MNsure has become a hurdle. In a private competitive market, the agent has that leverage. In a monopoly like MNsure, the agent loses that leverage.
“In order to solve problems, we need a full tool belt. This legislation is not helping with it,” said Ostermann “Agents like providing opportunities and choices.”
The legislation has created an unfair advantage for Navigators and Assistance.
“Think about another basic necessity that we have needed for years, food. If someone needs help buying food in Minnesota we give them an EBT card,” said Schneeman “Do we tell them they can only buy the food from a certain store? Do we tell them that we will decide what products you can choose? Do we tell them you can’t go to a regular store?”
Schneeman went on to say “But somehow we have decided that health insurance needs to be distributed through a monopoly store front. You can only use your coupons, with a product we are going to let you buy, on our account.”
The exchange is horribly anti-consumer, and it is anti- poor person.
“Why does someone who needs your assistance have to buy it through MNsure? Why can’t they buy it through an insurance agent?” Schneeman said “The price would be the same; the service would be far superior.”
To become a Health Insurance Agent in Minnesota, a person must go through 20 hours of classroom study (which the agent pays for out of their own pocket), then pass a test as well as purchase liability insurance and complete continuing education courses every year.
“Navigators and Assisters don’t have anything invested in the people,” said Ostermann “If I don’t get the people what they want, they fire me.”
Because the insurance agents negotiated their pay to come from insurance companies, they have no incentive to sell away from the exchange; other then the exchange is cumbersome and does not work well.
Unfortunately, the insurance agent must go through the MNsure site to have a full “tool belt.”
After reading the many complaints about the MNsure web site and call center, it would be a safe bet to say 9 out of 10 people are thinking to themselves that they wish they could get this subsidy somewhere else, like through my agent because the government sites do NOT work.
People are waiting on average of an hour or more on the call center, and with the web page, there are more problems then you can shake a stick at.
“They (MNsure) are trying to hire more call center employees who don’t know how the system works; either in the private sector or public sector,” said Schneeman “They are just taught to read off of a list.”
MNsure and our elected officials are misleading people and telling them to be patient with the system and to keep trying to work with MNsure instead of calling a qualified insurance agent.
An email sent out by State Senator Kathy Sheran, Senate District 19 on 12/16/2013 shows how some of our elected officials are misleading their constituents;
Although many of you are not purchasing health insurance through MNsure (the state health insurance exchange) because you are already covered under your employers, I did want to provide the information below as a tool for any small business or individual who is looking to sign up under MNsure. Below are the navigators in our Senate District that will be able to help those of you who are looking for coverage. Please share this information with anyone who you think would benefit.
Please let me know if you have any questions or concerns.
She then lists 3 navigators in Blue Earth County and states – Unfortunately, there are currently no navigators in Nicollet or Le Sueur County.
Was this an intentional oversight on her part or was she just reflecting the negative attitude towards insurance professionals that has been going on since the start of MNsure?
Ostermann was forwarded a copy of the email from a friend and replied to Senator Sharon.
I was made aware of the below email sent out to your constituent’s regarding Assisters in your Senate District. As a resident of your district, I am extremely disappointed that you only included 3 people, not one of which is an insurance agent. As president of our local NAIFA (National Association of Insurance and Financial Advisors), I would suggest to you that in our organization alone, we have 50+ individuals in the area that could help people enroll in MNsure. As far as LeSueur and Nicollet counties, there are several assistors that could help people enroll in MNsure. In your email below, you state there are none.
The misleading information regarding MNsure continues through many channels each and every day. I just never thought the misleading information would come from my senator’s office. If you would like more information on how MNsure is actually working, please feel free to call my office anytime. If I am unable to answer your questions, I can certainly get you in contact with my health insurance board chairman who knows more than me.
If there is a reason you listed only 3 people in Blue Earth County and said there were none in LeSueur or Nicollet County, please let me know.
Chad W. Ostermann, NAIFA-Southern President
Senator Sharon’s lack of support for local small business owners was disappointing, especially since she has been heavily involved with the MNsure process.
“This just goes to show that MNsure is discouraging the use of an insurance agent,” said Ostermann “She never responded to my e-mail or gave me a phone call.”
Senator Sharon did send out another email to her constituents with more navigators/assistants and saying that people can also get their insurance through an insurance agent.
Not only is the insurance agent competing with a monopoly, it appears that they are competing against misleading information by some of our elected officials.
The silver lining with MNsure is that many of the reforms that are in the ACA really help the agent because it allows them to place people in policies and allows agents to be a better advocate for out clients.
Something that many people do not hear about or know is that you do not have to get your health insurance through the exchange.
“All of the insurance policies in Minnesota have to meet the same standard as MNsure,” stated Schneeman “The policies have the same everything with the difference being premium assistance.”
The reason for people to use the exchange is for a premium subsidy. A lot of people think they are eligible for subsidies and it turns out they are not.
“When someone does not qualify for a subsidy, we tell them stop right there and go outside of the exchange because the policies are guaranteed issue outside of the exchange too and it is easier to get your policy,” said Schneeman “Plus you are not going to be turning over your private information.”
The exchange has definite limitations with some counties having far more choices in plans then others. Blue Earth County has only 15 plan choices, none being the top or Platinum product. If you go across the river into Nicollet County, there are 26 plans with 2 of them being the top Platinum product.
Blue Earth County is part of both Senator Sharon’s and Representative Kathy Brynaert’s district. When I called to find out why there were so few choices in the county and why there was not a Platinum plan, Senator Sharon told be “You should enroll to become a Navigator so you can better understand MNsure.” Representative Brynaert told me “I had to vote for the MNsure bill to know what was inside of the Bill.”
“With Blue Cross in the metro area, there are 17 individual policies and only 5 are available through the exchange,” said Schneeman “MNsure is the place if you want to get assistance, it is not the place to get health insurance.”
Many insurance agents are getting multiple phone calls a day from people not getting any information from the state about their policies. If you don’t have an insurance card, you don’t know if you are covered.
To add to the confusion, of whether or not a person is covered through MNsure, over 1,000 people were asked to redo applications because MNsure lost them.
For those without computer access, the MNsure call center told people to go to the library and ask a friendly librarian to input the paper application into the computer.
How many librarians have that in their job description? How many librarians are covered by some sort of privacy agreement? Yet the MNsure call center wants you to be giving that librarian your ss #, income, family members. Why the call center did not suggest going to an insurance agent is yet more proof that they are not thinking about the insurance agent.
If you need someone to input your paper form MNsure application, go to an insurance agent.
If people believe that we needed to completely reinvent the health system to reduce the number of people who are uninsured, then a person would certainly expect that MNsure would be measuring who is uninsured now and asking why they were uninsured on the MNsure site.
MNsure President Brian Beutner acknowledges that they are not measuring who was uninsured or why they were uninsured. Beutner is saying that it is the job of the Department of Health, yet, MNsure finds the important question of would you like to register to vote relevant to the site?
Why is being registered to vote a more important question then “are you uninsured right now” or “why are you uninsured” on an insurance site?
It is a TRAVESTY that they are not even asking these questions.
In a few years, the department of health will do a state of insurance, from a general stand point, but they do not actually measure it.
If you talk with any business person or organization which intends to make a difference, they measure those things that they make a difference.
The web site does not work half of the time, the call centers are busy and the navigators can only put you into products that are in the exchange yet, our Democrat legislators and the appointed officials running MNsure are telling everyone to use the exchange?
“Those of us who have been working really hard, to try to turn MNsure from just a public enrollment thing into a tool to help address the uninsured in Minnesota, we couldn’t be more disappointed with what they put out,” Said Schneeman “They are stomping on the feet of people who have been solving problems and they don’t care.”
The nightmares that are coming out of working with MNsure are not difficult to find. The people who think that they have escaped the nightmares may be in for a rude awakening.
“A MNsure representative told me that 95%-98% of kids get booted out of a family plan and put on medical assistance, separating the parent(s) from the child,” said Ostermann “Doctors can refuse medical assistance.”
Contrary to what MNsure and many of the political mouth pieces are saying, if you are looking to get insurance, you have choices. You can work with someone who only has one product that they can sell, or you can work with someone who has a lot of tools in their tool belt to help you solve your problem.
If you would like to see if you qualify for a subsidy, SevenHills has an easy to use calculator.