Covered California Health Plans Ignore Agents

Covered California has been assuring health insurance agents that they will be an important part of the effort to enroll millions of

residents in affordable health insurance. Unfortunately, many of the health plans they have selected for the California market place are giving insurance agents the cold shoulder.

Health plans ignore cheap marketing from agents

The only way agents can be compensated for marketing the new health insurance options and assisting with enrollment is to be appointed by each of the health plans. Without being appointed by the health plan, the agent or general agency can’t receive commissions. Without being compensated, there is no reason to discuss the health plans with prospective clients. Six of the thirteen chosen health plans for the individual market have been completely non-responsive to any of my inquiries about being appointed.

• Alameda Alliance For Health
• Contra Costa Health Services
• Molina Healthcare
• L.A. Care Health Plan
• Ventura County Health Care Plan
• Valley Health Plan

Will these plans be ready to service new members?

When I say unresponsive I mean numerous email and phone calls that aren’t returned and absolutely no guidance on their websites about how to be appointed. Some of the websites are atrocious in terms of design (if there is any) and functionality. One of the sites couldn’t even send my email because it could generate the “captcha” field for verification. If I am experiencing these problems, and I’m not even looking to be treated for an illness, I can only wonder what the member “experience” will be like after people enroll in the plans.

Maybe these health plans are the government option

All of these health plans, several run by a government entity, focus almost exclusively on Medi-Cal, Medicare and civil service employees. They have little experience in the private health insurance market place or using health insurance agents to market their plans. They derive most of their revenue from government sponsored health care programs. While there is nothing wrong with that, it leaves them with little experience when it comes to competing for members.

Competition sharpens customer service

In addition, all the of the non-responsive health plans that are ignoring health insurance agents are regional, not state or nation wide. Three regionals, Chinese Community Health Plan in San Francisco, Sharp Health Plan in San Diego, and Western Health Advantage in Sacramento have at least been responsive to inquiries. These plans also have to compete in the open market and consequently have sales departments that have worked with agents and brokers.

Working with agents is in the contract

Chinese Community HP said they would have more information about agent appointments after the SHOP plans were announced. I don’t entirely understand why they need to wait until after the announcement because health insurance agents will be appointed by Covered California for the small group market, not the actual health plan. Sharp has accommodated my request to be appointed and I was fortunate enough to become appointed with WHA several years ago. I don’t ask for much and I understand the enormity of preparing for the new health insurance market place. However, these plans should be working toward fulfilling the contract they have signed with Covered California.

From the Covered California model contract with Qualified Health Plans

3.29 Agents in the Individual Exchange.

(c) Agent Appointments. Contractor shall maintain a reasonable appointment process for appointing agents who contract with Contractor to sell Contractor’s QHPs to individuals through the Exchange. Such appointment process shall include: (i) providing or arranging for education programs to assure that agents are trained to sell Contractor’s QHP through the Exchange, (ii) providing or arranging for programs that enable agents to become certified by the Exchange; provided, however, that certification by the Exchange shall not be a required condition for an agent to sell Contractor’s QHP on the individual market and (iii) confirmation of agent’s compliance with State laws, rules and regulations applicable to agents, including those relating to confidentiality and conflicts of interest, and such other qualifications as determined in Contractor’s reasonable discretion.

Need and Support Agents, that’s what they said

On a recent webinar with Covered California for agents, Michael Lujan, Director of Sales and Marketing, went out of his way to tell agents how much they love and want agents. Covered California may love the agents, but it doesn’t sound like many of their selected health plans have gotten the memo they are suppose to love us too.

Let them come to us

It can be very difficult to change the corporate culture of any company. I am not too optimistic that the regional health plans will spontaneously embrace competition and establish a sales team. It could be they see no need for health insurance agents and are assuming most new membership will come from Covered California. On this point they could be 100% correct.

Not waiting for the new exchange to open

As I have said before, the private health insurance companies are two or three steps ahead of government programs and agencies. Anthem Blue Cross has communicated to their agents that they have relaxed their underwriting requirements on individual and family plans. First, this is important because it shows that professional insurance companies communicate with their sales staff to disseminate information to existing and prospective clients. Second, Anthem Blue Cross isn’t waiting for Covered California to open. They are already positioning themselves to lock up business before the exchange opens.

Anthem Blue Cross Communications

Why should your Individual clients buy now?

July 23, 2013

Many consumers may think it makes sense to wait until January 1, 2014 to buy health insurance, when their premiums won’t be based on medical underwriting. They may be concerned that they won’t qualify for one of our lower rating levels if they apply now. 

Early last year we announced several changes to our 2012 Medical Underwriting guidelines making it easier for your clients to obtain coverage at a lower rating level. Now we’re making more changes so it’s even easier for your clients to get the coverage they need at a lower rating level. These changes apply to Individual applications received on or after July 26, 2013. 

There has always been the concern that those most in need of health care services, and therefore potential insurance claims,  will sign up for guarantee issue plans and healthy people won’t. While I’m trying not to be too cynical, the relaxing of the underwriting guidelines may be an attempt to secure a healthier enrollment base before Covered California opens. In essence, selective marketing of preferred members without being overtly selective and breaking any laws.

Will the early bird get the worm?

While Covered California wrestles with getting their CalHEERS website operational for October 1st and some of the selected regional plans wait for the exchange to open and drive business their way, existing health insurance companies are actively marketing to the target audience of Obamacare. The inaction of these regional plans that are unresponsive to agents that want to represent them is effectively reducing the competition that has been at the center of the new health insurance market place. An agent that is not appointed with one of these regional plans won’t tell people not to enroll with them, but I can guarantee any mention of the those plans will conspicuously absent from any over view of Covered California to potential clients.