Texas Insurance Brokers Play Bigger Role In 2015's Obamacare
As Obamacare's second open enrollment season barrels to a close on Sunday, nearly a million Texans have purchased or applied for health insurance. Instead of going it alone, many applicants this time have turned to insurance brokers, who are aggressively marketing their services as savvy guides to Obamacare. It's a big change for the brokers, who have long had an uneasy relationship with the federal health law.
Bart Franco in the chapel next to his home in Houston.
Bart Franco is one customer who sought help from a licensed broker this round. He is the pastor of a community church that he founded in a garage behind his house near downtown Houston.
At age 65, Franco is retired and covered by Medicare, but needed to buy insurance for his wife and son. When he tried to enroll them in an Affordable Care Act health plan last year, he got nowhere.
"First, I called the 1-800 number," he recalls. "And I was on hold for 40 minutes and just hung up — gave up. I'm not going to put up with that."
Franco missed the 2014 deadline to get insurance on HealthCare.gov. He later called an insurance company directly — Blue Cross Blue Shield of Texas — and succeeded in purchasing a short-term catastrophic health plan for his family. But he felt the process was rushed.
"They just give you ... insurance," Franco says, and tell you " 'It costs this much, and you only pay $146 (a month).' That sounds good, doesn't it? OK, fine. You're hooked, and you don't even know what you have."
Franco didn't like the plan's high deductible, which was more than he made in a year.
So this year, when enrollment began again for 2015 plans, he turned to Jo Middleton, a licensed insurance broker who had advertised in the local paper.
"She connected us on the computer," Franco says. "She showed us everything; showed us a deduction, why we didn't want this and why we didn't want that. So she explained everything."
Franco's rough experience last year was common, says Middleton, who is also president of the Houston Association of Health Underwriters. People struggled to pick plans on their own in 2014, using the HealthCare.gov website. Many only learned later that they couldn't afford the deductible. Others discovered that their favorite doctor or hospital wasn't accepting a particular plan.
"Buying an insurance policy is not like going online and buying a vacation," Middleton says. "It's much more complicated. There are a lot more nuances."
Some shoppers turned to government-funded navigators for help — but there are fewer than 500 of them in Texas, compared to more than 190,000 health insurance agents.
Many brokers say the federal health law sidelined them from its inception, with marketing that focused on the navigators and the federal website.
Last year, Houston brokers worked individually to help consumers. But now they're uniting to assert their expertise and market themselves. Middleton has organized two enrollment events featuring brokers from the Houston Association of Health Underwriters.
A brochure by insurance brokers in Texas offering to help sign up people for insurance under the Affordable Care Act.
Brokers across Texas are trying multiple strategies: holding events with hospitals and community groups, putting up fliers and even buying TV ads.
The agents say the health law's impact on them has been mixed.
On the one hand, the law created a whole new market of potential customers for insurance agents, who get paid a commission every time they sign up one of those people for a new health policy.
But the brokers also say their commissions have been cut. That's because the law puts a cap on insurance companies' profits; some companies have avoided that squeeze on their own profit by reducing the agents' commissions as well.
Marcy Buckner is with the National Association of Health Underwriters in D.C.
"This has just kind of devastated the agent community, and has been in place for several years," Buckner says.
Her association is backing a bill in the new Congress that would help insurance agents and brokers with those reduced commissions.
In the meantime, Buckner says, brokers have had to adjust.
"We've seen some agents who have been able to really work the new opportunities that they've had in the marketplace," she says. They've "continued to grow their business, and have succeeded very well, while the others have still been struggling under this cut in commissions."
And some brokers have to switch their focus to Medicare policies or to health plans for small businesses.
It's too early for any exact numbers on how many brokers stayed in the game, or how many people they signed up. What is clear, a few days before the deadline, is that more than 9 million people have signed up or re-enrolled this year. And about 1 in 10 of those people is from Texas.
This story is part of NPR's reporting partnership with Houston Public Media and Kaiser Health News.
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Transcript
ROBERT SIEGEL, HOST:
Sunday is the deadline to sign up for health insurance under the Affordable Care Act. A lot of people signed up in Texas last year and insurance brokers took notice. They are aggressively marketing themselves this year. It's a big change because brokers in Texas have had an uneasy relationship with the health care law. Carrie Feibel at Houston Public Media reports.
CARRIE FEIBEL, BYLINE: Bart Franco is spending his retirement in prayer. Behind his house near downtown Houston, he's turned a damp garage into a tiny community church with himself as pastor. He prays for hours every day.
BART FRANCO: To hear the voice of God, not the voice of man and not the voice of the evil one.
FEIBEL: Franco leaves a lot of things in the hands of God, but he didn't do that when it came to health care. He has Medicare, but he wanted insurance for his wife and son. Last year, he tried to enroll them in a plan through the new exchange.
FRANCO: First I called the 1-800 number, and I was on hold for, like, 40 minutes and just hung up, gave up. I'm not going to put up with that.
FEIBEL: Franco then called the insurance company, but he felt the process was rushed.
FRANCO: They just give you an insurance and it costs this much and you only pay $146 - that sounds good, doesn't it? OK, fine. And you're hooked and you don't even know what you have.
FEIBEL: Franco also didn't like the plan's high deductible, which was more than he made in a year. So this time when Obamacare enrollment started, he used a licensed insurance broker.
FRANCO: She connected us on the computer. She showed us everything, showed us a deduction, why we didn't want this and why we didn't want that. So she explained everything.
FEIBEL: His broker is Jo Middleton, and she's president of the Houston Association of Health Underwriters. She says she's heard other stories like Franco's - that last year some people struggled to sign up on their own. Some picked a plan with a deductible they couldn't afford. Others found out later their doctors weren't in the network.
JO MIDDLETON: Buying an insurance policy is not like going online and buying a vacation, you know? It's much more complicated. There are a lot more nuances.
FEIBEL: Some shoppers did turn to government-funded navigators for help, but there are fewer than 500 of them in Texas compared to more than 190,000 health insurance agents. From the beginning, brokers felt left out of the law because the federal marketing focuses on the navigators and the website. But during the second wave of enrollment, insurance brokers and agents are stepping up on their own to tout their expertise. In Texas, brokers held events, put up fliers and even bought television ads.
(SOUNDBITE OF AD)
UNIDENTIFIED MAN: Confused by the sign of our times? The law requires health insurance and enrollment time is limited. Your local licensed health insurance agent will help you understand and enroll on a timely basis.
FEIBEL: Brokers say the health law's impact on them is mixed. Theoretically, the law created a whole new market of potential customers, and agents get paid a commission every time they sign one of those people up for a new health policy. But they also say their commissions have been cut and that's because of the law itself. It dictates how much money insurance companies can set aside for profit and overhead and some companies have dealt with that by cutting the agent's commissions. Marcy Buckner is with the National Association of Health Underwriters.
MARCY BUCKNER: This has just kind of devastated the agent community and has been in place for several years.
FEIBEL: The Association is backing a bill in the new Congress to tackle the problem. In the meantime, Buckner says brokers have had to adjust.
BUCKNER: We've seen some agents who have been able to really work the new opportunities that they've had in the marketplaces and have continued to grow their business and have succeeded very well while others have still been struggling under this cut in commissions.
FEIBEL: And some brokers have switched their focus to Medicare policies or health plans for small businesses. It's too early for any exact numbers on how many brokers stayed in the game or how many people they signed up. What is clear is that more than nine million people have signed up or reenrolled this year with a few days left still before the deadline. And about 1 in 10 of those people is from Texas. For NPR News, I'm Carrie Feibel in Houston.
SIEGEL: And Carrie Feibel's story is part of a reporting partnership of NPR, Houston Public Media and Kaiser Health News. Transcript provided by NPR, Copyright NPR.
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