Amendment Challenged for Insurance Exchange with Brokers

Rep. Mitch Greenlick (D-Portland) turns Senate Subcommittee on Health Care Reform into a referendum on insurance agents

March 21, 2011 -- Last Thursday’s contentious Senate Subcommittee on Health Care Reform work session on Oregon’s health insurance exchange bill illustrated the rough road ahead for legislation that would transform the state’s health insurance marketplace.

Rep. Mitch Greenlick (D-Portland), who was invited to the work session along with Reps. Jim Weidner (R-Yamhill) and Val Hoyle (D-West Eugene), quickly steered the conversation toward the role of independent insurance agents in the exchange.
 “If we have them in this, it could easily take me and my caucus off the bill,” said Greenlick, protesting an amendment to the original Senate Bill 99 that would allow the exchange to employ insurance brokers.
The exchange, which all states must develop and implement by 2014 as part of the federal Affordable Care Act, is envisioned as an online insurance marketplace offering consumers and small businesses an opportunity to shop for health plans. They can take advantage of tax credits and get lower insurance rates by participating in a larger pool.
At public hearings on the bill last month, independent brokers – who call themselves producers – came out in droves to express their concern that the exchange would put them out of business and deprive consumers of the individual guidance they provide.
Greenlick was not moved by their testimony. “We’re being whipsawed by one small group of businessmen to the detriment of the rest of the small business communities,” Greenlick said Thursday. “It’s completely outrageous.”
Subcommittee Chair Sen. Frank Morse (R-Albany) didn’t do much to stop Greenlick’s anti-agent diatribe, but Hoyle spoke up for brokers and the constructive role they can play if given a chance.
“Certain populations are best served by an insurance broker,” said Hoyle. When she worked with a broker to enroll people in a plan as part of her work at the United Way in Lane County, she appreciated the agent’s expertise. “There is value in their work,” she added.
Rocky King, the director of healthcare purchasing for the Oregon Health Authority who has played a key role in developing the exchange legislation, agreed.
“California ran a large insurance pool where you could [choose to] bring a broker in” to help with plan choice, said King. “About 80 percent of people did.”
The bill currently states that agents would be paid a 3 percent monthly commission for work conducted for the exchange – the same as they would net in the market outside the exchange. Greenlick called this “completely outrageous.”
“Building brokers into exchange is a secret way to add 3 percent to the cost of healthcare offered through the exchange,” said Greenlick. “This seems un-American to me. Let [consumers] make the choice.”
Beyond brokers, the subcommittee raised a number of questions about the bill’s newest incarnation, from the number of consumers on the board of directors to when businesses with 50 or more employees could be allowed to join.
Those questions and more will be answered – or debated – on Thursday, when the subcommittee scrutinizes the third round of amendments on the bill.


Proposed amendments to Senate Bill 99 here.
Outline of the health insurance exchange from the Oregon Health Authority here.
Prior coverage of the exchange in The Lund Report here.
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