How Oregon’s exchange move could affect brokers

Brokers and agents in Oregon are “frustrated and disappointed,” according to a local industry leader, as they start to consider how the state’s switch to Healthcare.gov  might affect them.

Leaders of Oregon’s health insurance exchange, known as Cover Oregon, on Friday confirmed they will close shop as a state-run entity and move over to the federally run medium. Cover Oregon never had a functioning website during the Affordable Care Act’s first open enrollment season, leaving consumers — and agents working with consumers — to use paper applications or the call center for signing up.

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“I don’t think anyone knows what it means to transition at this point,” says Michael Welch, current president of the Oregon Association of Health Underwriters and a group benefits broker at Larry Sherwood and Associates Inc. in Portland. He says Cover Oregon officials are in talks Monday and Tuesday with U.S. Centers for Medicare and Medicaid Services staff, the agency tasked with executing the federally run exchanges.

“There’s a great deal of frustration and disappointment in the broker community. A lot of them spent a lot of time to support Cover Oregon, enrolling people, and now they’re going to re-learn another system,” he says.

However, Welch isn’t sure if there was any other choice for the defunct state exchange. While the CMS platform was plagued initially with many problems itself, it’s at least functioning and accepting online enrollments, he says. “It’s pretty clear the money [Cover Oregon] spent up to this point … produced nothing,” he says. “They estimated it’d take another $78 million to get a functioning website.”

While the broker community doesn’t know for certain now, Welch says it’s likely that agents and brokers will have to complete new training to learn a new site, taking more time away from existing clients.

Kathy Gadinas, owner of Columbia Benefit Solutions in Lake Oswego, Ore. and legislative chair for the Oregon Association of Health Underwriters, says she talked with Cover Oregon officials Monday morning before their CMS meetings. “I want to work together, what I told them is … let’s make this work together,” she says, hoping for broker and agent input on the transition process, though noting it’s “too soon to tell.”

Gadinas, who helped many Oregonians complete applications, says her agency hasn’t received any frustrated or confused calls due to the switch from people who already obtained plans. Though, with the governor having extended the 2014 open enrollment in the state to April 30, those with currently pending applications have called her offices seeking guidance.

‘Artificial marketplace’

While Welch says he’s heard from many broker peers frustrated with Cover Oregon, “there’s a smaller fraction of people who are candidly happy, like myself, that it didn’t work.”

In Oregon, the insurance market was stable and competitive before the ACA, he says. They have eight domestic insurance carriers and several other multi-state carriers and “no one carrier has more than 33% of the marketplace. So the idea to be creative in a marketplace to create competition and drive pricing down — that was never necessary.” There are some U.S. states where a single carrier has 80% market share, but in Oregon an “artificial marketplace” didn’t need to fix that, he says.

He adds that never getting on board with the concept has paid off given the recent decision to switch to Healthcare.gov: “I don’t have to go through all this.”