The exchange builders in the District of Columbia are wrestlingwith questions about how their Patient Protection and AffordableCare Act (PPACA) exchange should work with agents and brokers.

One question is whether an exchange should let licensed healthinsurance agents and brokers wait until they have actually sold anexchange policy from a particular insurer before getting anappointment with that insurer.

See also: Twoinsurers trim D.C. small-group exchange rates

Another question that's come up is whether an exchange shouldcare about "steerage" -- intentional or unintentional efforts bybrokers to steer consumers toward or away from certain plans --and, if so, how an exchange should try to prevent steerage.

Members of the producer advisory committee at the D.C.Health Benefit Exchange Authority, the agency in charge of settingup the district's DC Health Link exchange, talk about thosequestions in a report that could come up forconsideration Thursday at an authority board meeting.

PPACA opponents have ramped up efforts to kill the law. If thework takes effect as written and works as backers expect, it willrequire federal and state agencies to have exchanges, or healthinsurance supermarkets, selling health insurance for individualsand small groups by Oct. 1, with the first coverage sold to takeeffect Jan. 1, 2014.

The District of Columbia is setting up its own district-basedexchange.

The D.C. exchange authority has raised producer eyebrows byworking to require all new individual health insurance sales to gothrough the exchange in 2014, and to eventually move allsmall-group sales onto the exchange. Brokers could still advise theemployers, exchange officials have said.

But the producer advisory committee includes several producersand insurance company representatives, along with consumerrepresentatives, and the facilitator is Janet Trautwein, the chiefexecutive of the National Association of Health Underwriters(NAHU).

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All committee members agreed to oppose the idea of lettingproducers wait until they have actually sold an exchange plan, or"qualified health plan" (QHP), from an exchange carrier beforegetting an appointment with that carrier.

"Producers, carriers and consumers agreed that it was criticalthat a broker’s [errors and omissions (E&O)] insurancebechecked before that broker was allowed to sell a carrier’s healthplan," the committee said in the report.

"Requiring appointments with carriers after a sale leavescarriers and the exchange potentially liablefor any mistakes madeby the broker and fails to protect the consumers in a waythatgenerates confidence in exchange health products and brokersselling them," the committee said.

Committee members agreed that the exchange should simply try tomake getting an exchange carrier appointment as easy aspossible.

In the discussion about steerage, the committee noted that oneconcern is that steerage could lead to producers steering consumerswith health problems toward certain exchange carriers.

"Most state exchanges have yet to fully resolve this issue, butthe approachesbeing considered include: establishing a compensationstructure for all brokers in theexchange; having the carrier payingthe commission for products sold in the exchange;requiring the samecompensation inside and outside the exchange," the committee said."A few stateexchanges are requiring all brokers to be appointed byall carriers and all carriers toappoint all brokers."

Committee members decided that having all exchange carriers giveappointments to all exchange producers should reduce the risk ofsteerage in the district.

"Because of the relatively small market and theall-appointmentrequirement, producers have a strong incentive tohelp the consumer make the rightchoice," the committeesaid.

See also:

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