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Insurance agents prepare for Obamacare

Thursday, June 20, 2013

By SAM JACKSON - Bulletin Staff Writer

As the Jan. 1 implementation nears for most of the Patient Protection and Affordable Care Act, the uninsured and under-insured aren’t the only ones feeling a sense of angst. Try being an insurance agent.

Some consumers who will have to buy health insurance on the individual market or pay a fine are uninformed or unsure how the changes will affect them. Charles Dameron, an insurance agent in Martinsville, said he gets questioned about the Affordable Care Act (ACA) on a routine basis.

Most of the people who seek his advice are so in the dark on the changes to the system, “they don’t know what to ask,” he said, “and I don’t know what to answer in most cases.”

Debbie McBride, owner of Trinity Insurance Services, also has seen plenty of confusion among her customers and prospects.

“We’re still a little bit in the dark as to what’s coming,” she said. “We know that some of our (providers) are going to be offering products on the exchanges.”

The exchange system is a competitive marketplace of government-regulated health care plans from which individuals will be able to buy health insurance and receive federal subsidies, according to Health Insurance 101, a consumer protection website.

Gov. Bob McDonnell announced in February that Virginia would not set up its own state-run health exchange, opting instead for the federal exchange. However, McBride said, the federal exchange is not yet in operation, so she has few answers for people interested in using the federal marketplace.

“We’ve told our customers to call us, but right now we don’t know a whole lot,” she said.

Apparently, neither do some clients. “We talk to people every day who don’t even realize health care reform is coming,” she added.

The rollout of President Barack Obama’s health care overhaul is going full-speed ahead, despite repeal efforts by congressional Republicans. Exchanges are to open in every state this fall, with open enrollment scheduled to begin Oct. 1. Middle-class consumers who don’t get coverage on the job will be able to pick private health plans, while low-income people will be steered to an expanded version of Medicaid in states that accept it, The Associated Press reported recently. Gov. Bob McDonnell has not yet made an announcement on whether Virginia will accept a Medicaid expansion.

The goal is to cover most of the nation’s nearly 50 million uninsured, but even Obama has said there will be bumps in the road. One could be the possibility of insurance plans being discontinued automatically if they don’t measure up to the federal government’s new specifications.

Dameron said that doesn’t square with one of the president’s best known promises about his health care overhaul: “If you like your health care plan, you’ll be able to keep your health care plan,” Obama told the American Medical Association in 2009. “No one will take it away, no matter what,” the AP reported.

However, Dameron said, “If (your) employer drops a plan, you can’t keep it.”

At the time, some saw Obama’s promise as too broad, given that health plans constantly are being changed by employers or insurers. Nonetheless, Democrats in Congress devised a complicated plan called “grandfathering” to try to deliver on Obama’s pledge. It can shield plans from many of the law’s requirements, provided the plans themselves change little, the AP reported.

Dameron said that promise also is impractical, since some plans currently would not meet one of the ACA’s four tiers — bronze, silver, gold and platinum. Under the tiers, providers will be required to pay 60, 70, 80 and 90 percent respectively of health care costs for the average person, according to Healthcare 101.

Until now, what Dameron called “limited benefit plans,” which covered 50 percent of costs or less but were cheaper to buy, had been available on the open market. Now, “those, I think, probably will go away,” he said, as both individual and group insurance plans are forced to adapt to the federal tiers.

“On the group plans, most of them have already changed,” he said, to meet mandates such as allowing children to be covered on their parents’ policies until age 26.

Many employer-sponsored health care plans already have changed to comply with the coming federal standards, Dameron said, but some employers could make drastic changes to avoid the new rules. Employers with more than 50 workers either must offer group medical plans or pay a tax, he added.

“At 49, they don’t have to have a group plan; at 50, they do. (That’s a) big, big expense” since employers who offer group plans will be required to pay at least 50 percent of health insurance costs, Dameron said.

As more individuals are directed into the open market to shop for their own health care policies, the impact on agents such as Hiram Dillon of Dillon Insurance in Bassett could be a double-edged sword.

Dillon said the flood of potential customers won’t necessarily be a boon to agents, because “a lot of people will go right to the exchanges and bypass the agents directly,” he said.

“It’s going to benefit us, because it’s going to create more customers,” he said. However, agents who want to prevent local shoppers from simply signing up for coverage on the federal government’s exchange website will have to emphasize personal service, Dillon added.

He said that the pool of 50 million uninsured Americans and others who will seek coverage through the exchanges likely will force the government to bring in new workers to handle the volume of clients. Government agents may be hired who don’t know anything about insurance, and “that makes no sense,” Dillon said.

Most agents will be eligible to sell through the exchanges, he said, but “I don’t know any details, because no guidelines have come out.”

As far as selling to individuals through the federal exchange is concerned, Dameron said, “I wrote a letter to my congressman and told him I don’t like it, but it’s better for us to have (the ability to sell policies) than the federals to have it.”

Regardless of where coverage comes from, local agents are trying to express to their clients and prospects that their options or their coverages likely will change come Jan. 1. McBride said she is set to attend a meeting in the coming weeks to clarify exactly what services her office can provide and how, but until then she hopes to keep spreading the message that reforms are on the way.

“This is going to affect everybody,” she said.


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