One of the most famous lines from the 1987 movie Planes, Trains, and Automobiles is “You’re going the wrong way!”
That’s also what HHS officials probably feel like screaming at some of the states because, instead of developing their own individual marketplaces – the way it was supposed to happen – more states are abandoning their multi-million dollar exchanges and opting to let HHS do the job for them.
Oregon made that decision last month after its exchange crashed and burned. Actually, that’s not true – it never even got off the ground, so it wasn’t able to crash. A few days later, Nevada announced that it would scrap its state exchange and move to the Healthcare.gov marketplace next year. Other states are likely to follow.
The federal site was actually supposed to be the backup plan, as Politico reports in an article entitled “GOP’s Obamacare fears come true” – the idea was for each state to develop its own exchange with the federal government creating a site “just in case” a state could not or would not create its own. But now, Healthcare.gov has become the preferred option for a majority of states, which is a bit ironic considering its very rough start last October.
Most Republicans aren’t happy with the current trend because one national exchange would give the federal government more control – and the state governments less. But at this point, with few success stories and several of examples of how not to do it, it’s unlikely that a lot of new states will decide to build their own marketplace site.
This could be good news for brokers with private exchanges, though. That’s because a private exchange site gives brokers the option of enrolling clients in exchange-based plans or plans sold in the outside market and even help people apply for government subsidies, but the application for financial assistance still runs through the state or federal exchange. And states can set their own rules, including whether to allow brokers to sell exchange-based plans or earn a commission. For states that utilize Healthcare.gov, the federal government sets the rules, and HHS has decided not to block brokers from participating or make any decisions about compensation – that’s between the brokers and the insurance companies.
While one big, national exchange can be a bit scary because it does indeed give the federal government even more power, it’s also more efficient than 50 separate exchanges with 50 separate sets of rules. HHS knows it needs brokers to reach its enrollment goals, so with Healthcare.gov expanding its reach and more carriers opting in for next year, there’s plenty of opportunity for insurance agents with the right technology to grow their business.