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The Dilemma for Health Insurance Brokers

For many health insurance brokers, the future is very unpredictable.  Not only have there been repeated attempts this year to repeal and replace the Affordable Care Act which would radically reshape the health care and insurance industries, but there are a host of other issues like the possible termination of cost-sharing subsidies, lack of enforcement of the Individual Mandate and more insurers leaving private insurance exchanges that are affecting markets.

This has made selling health plans an increasingly more difficult proposition. In the years since the implementation of the Affordable Care Act, also known as Obamacare, many insurance brokers knew what to expect from the federal government and insurance markets. However, the new Trump administration has a radically different approach to managing the U.S. health care system that has put the markets in turmoil.

Unfortunately, any time there is any serious change to the business environment, companies respond with protectionist policies.  In the insurance industry, that almost always translates into higher premiums for policyholders.  Not only does that make promoting health insurance policies more difficult for many brokers, it often reinforces rising rates because fewer people are in the insurance pool.

What Are Insurance Brokers?

First of all, to understand the situation, you should know what insurance brokers are and what they do.  Insurance brokers like those at Boost Health Insurance serve as advisors to clients who want a certain type of policy. These highly knowledgeable insurance professionals often share their expertise regarding policy terms, benefits, exclusions and costs with clients so that the client can make an informed decision about what policy to choose. Brokers often have a variety of policies available that they can recommend, including some that aren’t available to the general public.

Health Insurance

Unlike insurance agents that are paid by insurance companies to sell their products, insurance brokers are independent intermediaries that are here to serve the client’s interests.  That is why so many health insurance brokers have supported Obamacare health plans that are often subsidized by the federal government. They recognize that these robust health plans offer top-notch benefits often at amazingly low rates.

Potential Challenges

Because so much of what insurance brokers do now centers on Obamacare health plans, any changes to the present system is problematic. President Donald Trump and many of his Republican colleagues in Congress promised voters that they would scrap the Affordable Care Act and replace it with a system that covers more Americans in a more cost-effective way.

Repeated attempts by Congress to accomplish this have ended in failure, but the efforts to reform the American health care system was enough to spook the insurance sector.  Trump and the GOP continue to promise that they will repeal and replace Obamacare, so insurers are ratcheting up their rates in anticipation of upcoming turmoil in the markets.

In addition to uncertainty about the future of ACA, many insurers are unsure if the present administration will even maintain the current system.  President Trump has repeatedly threatened to discontinue cost-sharing subsidies to insurers.  These cost-sharing payments help offset the losses that many insurers incur by selling low-cost health plans. The $7 billion that the federal government is expected to pay out this year helps almost 7.1 consumers purchase health insurance policies off of the exchanges.

Without these cost-sharing subsidies, premiums for many lower tier plans could jump up dramatically. For example, in California, if the administration fails to make its payments, premiums on Silver tier plans in the state could rise 12.4 percent.  Not only will this make it more difficult for many people to afford their plan, it could also force many insurers to exit the market due to unprofitability.  The few remaining insurers would likely raise their premiums as competition shrinks and in an effort to compensate for a smaller pool of enrollees.

Another upcoming challenge for many brokers is that the Trump administration is making it more difficult for people to enroll in Obamacare.  In the past few years, the open enrollment period for Obamacare was more than two months, but starting in 2017, it will be shortened to merely six weeks.

To further undermine Obamacare, the Trump administration has also slashed $90 million from the advertising campaign that would have promoted the open enrollment period later this year.  The Department of Health and Human Services has also cut funding to organizations that assist people in enrolling people from $63 million to $37 million. This will make it especially difficult for insurance brokers to enroll people in the 39 states that rely on federal assistance to operate the health insurance exchanges.

While the lack of promotion may not hinder enrollment for many sick Americans, it may allow younger, healthier people to slip through the cracks.  This is further exacerbated by the Trump administration’s refusal to enforce the Individual Mandate and Employer Mandate—provisions designed to encourage enrollment by healthier people.  Without this healthy population, insurers are left insuring only sick enrollees who are much more expensive to cover.  This will likely cause insurers to raise premiums even further or to exit insurance markets that prove too unprofitable.

Enroll in Obamacare

For more than 20 million Americans, the Affordable Care Act was a golden opportunity to obtain health coverage for merely a few dollars a month.  Americans who made between 100 percent and 400 percent of the poverty threshold can find a health plan on the insurance exchanges and qualify for a large monthly subsidy that cuts premiums by hundreds of dollars.  If you make less than 133 percent of the poverty level and live in an eligible state, you may qualify for Medicaid, another federal insurance program.

You should take advantage of this amazing opportunity while you can.  You can visit a reputable insurance broker like Boost Health Insurance to learn more about plans available in your area.  If you need assistance choosing the right plan for you and your family, speak with one of our highly qualified insurance experts to learn about available policies.

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