By Kristen Schorsch July 16, 2013 ; Crain's Chicago Business
Gov. Pat Quinn is reviewing a bill passed by the Illinois General Assembly that critics say would limit the advice consumers will receive while picking policies on the state's health insurance exchange.
The new law was supported by some insurance groups, which fear brokers' commission-based business will be eaten away by the online exchange, which is set to open for enrollment on Oct. 1 for coverage required on Jan. 1.
The legislation, approved in May and sent to the governor on June 26, defines the role of “navigators,” government-funded positions created under the federal Affordable Care Act. Working through community groups, navigators are intended to help individuals and small businesses as they sort through their options on the exchange. Under the proposed law, navigators could distribute “fair and impartial” information but would be prohibited from recommending or endorsing a particular health plan.
“If we didn't have this type of regulation, it has the potential to render our license somewhat meaningless,” said Phil Lackman, vice president of government relations for Springfield-based Independent Insurance Agents of Illinois.
The pending legislation also prohibits navigators from accepting compensation based on whether someone enrolls in or buys a particular plan, which is traditionally how brokers are paid, in an effort to prevent navigators from improperly steering customers to one carrier or plan over another.
Illinois is among more than a dozen states that have enacted laws or have pending legislation that would restrict what navigators do, according to experts at the Georgetown University Center on Health Insurance Reforms.
“A consumer should want competent advice,” said state Sen. William Haine, a Democrat from downstate Alton and a sponsor of the bill. “They shouldn't want a laissez-faire attitude toward competency, just as we do not want people who have little knowledge of the law giving legal advice.”
ARE OTHER STATES LAWS LIKE ILLINOIS?
Legislation like the Illinois bill is likely to create confusion as consumers are shuffled between brokers, navigators and other government resources, experts say.
“That makes what's supposed to be a pretty seamless experience full of cracks,” said Christine Monahan, a senior health policy analyst at the Center on Health Insurance Reforms.
Navigators will likely target low-income communities that insurance brokers typically don't serve, yet the law means that low-income consumers might not receive the same information that more affluent shoppers could obtain.
“Once again it will be up to the social sector to help people navigate because of how the legislation is trying to tie people's hands on this,” said Barbara Otto, CEO of Health & Disability Advocates, a Chicago nonprofit.
The bill would also apply to so-called in-person assisters, who essentially perform the same function as navigators but are funded differently.
The U.S. Centers for Medicare & Medicaid Services will choose navigators in Illinois as part of a $2.3 million local effort. In-person assisters will be funded through $28 million in federal money to be awarded by the state to community organizations.
The state plans to announce those grants this month, a spokesman for the Illinois Department of Insurance said. CMS anticipates naming navigators in August, according to the federal agency's website.
The pending legislation allows navigators to refer customers who acknowledge having an existing insurance broker to that person, except in some circumstances, including if the provider is not authorized to sell plans on the exchange.
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