Las Vegas resident Connie Densmore, a financial adviser and tax preparer, is used to dealing with technical terms and jargon.
But when she needed to pick a new health insurance plan this year, she turned to an expert: insurance agent Patricia McCready-Lucas.
“Pat guided me to figure out what I need … and where I could get the most bang for my buck,” Densmore said.
Unfortunately for consumers, that sort of expert health-insurance advice is becoming harder to find.
As insurance companies nationwide look for ways to cut costs, commissions for individual plans have been reduced and in some cases eliminated.
That has led many of the hundreds of brokers and agents in Nevada to focus on other more-profitable sectors and made it harder for shoppers to find help navigating the complicated and confusing marketplaces for individual health insurance, either private or via the Affordable Care Act (ACA) exchange.
On the Silver State Health Insurance Exchange, the state’s official portal for so-called Obamacare plans, the number of brokers and agents registered to assist users declined from roughly 500 last year to about 150 this year, said Executive Director Heather Korbulic.
“Those are business decisions that I don’t think they wanted to make” but were forced to because of the commission cuts, she said.
After commissions were announced in September, prior to the ACA open-enrollment period that began Nov. 1, the exchange anticipated the decline in broker participation and added extra advisers to help Nevadans enroll, Korbulic said. There also is a searchable database of advisers on Nevada Health Link, the exchange’s website.
But many types of advisers can only provide general guidance and can’t recommend which plans best meet a client’s needs as brokers and agents can, Kobulic said.
McCready-Lucus, who offers commercial, auto and other types of insurance, said her individual health insurance client base grew sharply after the enactment of the ACA in 2010.
“I wasn’t doing a lot of individual health but then my clients needed help,” she said.
Since then, she’s seen commissions drop by more than 50 percent in many cases and to zero in some instances.
‘DYNAMICS OF THE MARKET’
The cuts to commissions for new enrollments and re-enrollments — usually either a fixed amount or a percentage of the premium per month — came as insurers struggle to avoid losses on ACA insurance exchanges nationwide.
Nevada’s largest insurer, UnitedHealthCare, said that it will still pay commissions on renewals, though at a lower rate, but not on new policies.
“Our actions are consistent with our long-stated approach to continually evaluate the dynamics of the market as they evolve, and to refocus our resources as necessary so that we can provide consumers with access to quality care,” the company said in a statement.
Anthem, another major Nevada insurer, said in a news release that it will lower commissions on new policies and keep commissions the same on existing ones for 2017 plans.
“In evaluating these changes, we believe they are necessary to create long-term sustainable pricing while providing consumers with access to health care coverage that remains affordable,” it said.
McCready-Lucus said her contract with Sierra Health, which is part of UnitedHealthCare, was terminated this year and she no longer earns any commissions from the company.
But her name was left on renewal paperwork it sent to clients, and they still call her with questions, she added.
‘PEOPLE NEED HELP’
An agent for more than 30 years, McCready-Lucus said she’ll continue to help clients, though she’ll be working for less pay.
“People need help,” she said. “They don’t know what they’re signing up for.”
The National Association of Health Underwriters, which represents agents and brokers, warned of the possible impact of the commission cuts in October.
“Fewer producers have completed registration and training … due to recent changes in producer compensation from the insurance carriers, resulting in producers needing to refocus their agency resources on other areas in order to remain in business,” the group said.
Nick Stosic, insurance regulation liaison with the Nevada Division of Insurance, said the ACA’s requirement that insurers allocate between 80 and 85 percent of premium revenues for medical care reduced profits and increased pressure on the companies from investors and others to lower commissions.
“This is not in any way unique to Nevada,” he said.
Las Vegas insurance agent Eliam Marcos Marrero Bernal said providing guidance for little or no money hurts his bottom line. But he continues to do so as much as possible, because he relies on clients for referrals and hopes they might purchase other types of insurance through his business or sign up for the tax guidance he also offers.
“You try to help your clients,” Marrero Bernal said, “but at the end of the day, there are bills to pay.”
STATE BARS CHARGING FOR ADVICE
Some insurance brokers would like to be able to charge individuals for helping them enroll or re-enroll in health insurance plans, but so far that’s a non-starter.
Nevada doesn’t allow agents or brokers to charge consumers for individual insurance policy assistance, though they can charge for small group insurance, according to the Nevada Division of Insurance.
Meanwhile, officials with the agency announced in September that they are looking into whether the cuts to commissions violated the law, as they were reflected in insurance rates that it approved for 2017.
Generally broker commissions aren’t part of the regulatory process and are handled between agents or brokers and the insurance companies. But if the reduced commissions mean insurers are charging consumers “excessively” or they fall outside the range approved by the state, the division would have to consider how to resolve the issue, said Glen Shippey, an actuarial analyst with the Division of Insurance.
That wouldn’t happen until the division could review claims, profit statements and other information at the end of 2017 to determine how much money was paid out by the companies on claims.
In the meantime, Densmore, the health insurance buyer who got expert help, said she sympathizes with those who don’t have a pro in their corner.
“She helped me navigate the waters because I had no idea,” she said.