Officials recently released 244 pages worth of regulations governing the health-insurance exchanges established by the federal health reform law.
The rules envision a big role for "navigators" —entities or people expected to help consumers evaluate their health insurance options in the exchanges. Some groups intend for navigators to replace the folks who currently help consumers with their insurance needs—licensed, professional health insurance agents.
That would be a disaster. Although it will take many different voices to let people who are uninsured today know about the health insurance options available in 2014, expanding the role of navigators from promoting program availability to enrolling and advising people about specific plans is a consumer hazard. These navigators will lack not only the expertise, training, and licensing that agents possess but also sufficiently strong incentives to serve in an advisory capacity.
So who will these navigators be? That's not yet apparent— and will vary from state to state.
The law specifically lists agents and brokers as groups that may be navigators. But the law's financial requirements would force most agents and brokers to disrupt their business models and could prevent them from serving current clients who might be ineligible to purchase coverage through the exchanges. So it's doubtful that many will participate in the navigator program. They may instead try to work with the exchanges in more traditional ways.
The proposed exchange rules also specify that at least some of the navigators must be "consumer-focused" or "community-based." In other words, they'll need to demonstrate an existing relationship to consumers.
Observers believe that trade, industry, and professional organizations; unions; chambers of commerce; and small-business development centers could be among the groups that serve as navigators. That makes sense. Their relationships will be important in educating the public about new insurance opportunities in 2014.
Many are likely to have expertise with outreach to specific populations. But it's safe to assume that most will not be qualified to perform the work of agents and brokers, who have been linking consumers to appropriate health insurance policies for decades. Agents and brokers must already comply with state licensing and continuing education requirements in order to advise consumers about health insurance options. This important consumer protection is expected to continue.
How would navigators be paid? Although states must have navigator programs, no federal funds can be used for their payments, which are described as grants. It's unclear whether states must come up with this grant funding, how much these grants would be, or how they would work.
With some 42 states and the District of Columbia facing budget shortfalls in 2012, most states won't have the money to support the sort of robust navigator program the drafters of the law envisioned.
And what exactly will navigators do? The law says they will focus on public education, outreach to special populations, and facilitating health-plan enrollment. But the navigator program's goals do not include providing plan-year-to-plan-year assistance to consumers regarding the functionality of their health coverage. By contrast, that's an integral part of private health insurance agents' jobs and business models.
Agents and brokers aim to keep their clients for life and have financial incentives as private business owners to furnish them with ongoing service. Agents hold seminars to educate employees, fight to make sure claims are paid, and help their clients find the right doctors and healthcare providers. The Congressional Budget Office has reported that many insurance agents even function as virtual human resources departments for small businesses.
It's no wonder that those who have worked with agents have been satisfied. A 2007 IBM survey found that 75 percent of those who employed agents held favorable views of them. More than half cited "personalized experience" as what they liked most about their insurance broker.
Every day, agents go above and beyond the call of duty. Their livelihood depends on it.
Consider the case of Idaho resident Anne Marie G., who publicly lauded the efforts of her agent Brooks Mathern to handle "indecipherable" paperwork and claims in the wake of the birth of her child.
Or take Maryland broker Marcia Friedman, who through diligent research found a way to get additional coverage for a 10-year-old autistic girl who had exhausted her family's mental health coverage.
These are the sorts of problems that agents and brokers have solved for years— and that navigators will be poorly equipped to deal with.
Millions of consumers depend on insurance agents to help them secure high-quality coverage for their families—and to advocate on their behalf even after they pay their premiums. Navigators may try to imitate agents, but they'll never be able to duplicate them.
Janet Trautwein is CEO of the National Association of Health Underwriters.