Brokers simplify, confuse health exchange shopping





Washington insurance commissioner:

Washington insurance exchange:

Tips for working with health insurance brokers

Tips to avoid fraud in the health insurance marketplace:

• Don't trust a website that asks you to enter personal data such as a Social Security number, bank account number or credit card information other than the federal exchange website,

• The services of navigators or certified application counselors are free, but they can't sell you a policy or recommend a specific insurance plan to buy. They can't sell you an insurance policy and should not ask you for money to enroll in a health plan.

• If you have Medicare, it's against the law for someone to sell you a plan on the insurance marketplace.

• No one should ask for your personal health information.

• Don't give your Social Security number or credit card or banking information to companies you didn't contact or in response to unsolicited advertisements. A navigator or other assister may need certain personal information like a Social Security number to help you enroll.

• Never give your personal information to someone who calls or comes to your home without your request, even if they say they are from a marketplace.

• Write down and keep a record of a salesperson's name or anyone who may assist you, who he or she works for, phone number, street address, mailing address, email address, and website.

• Don't sign anything you don't fully understand.

• It's not true that insurance premiums are only good for a limited time. Enrollment in the exchanges will be open through mid-March and rates for plans approved for sale there stay in place until then.

• If someone tells you that you could go to jail for not having health insurance, don't believe it. Beginning next year, all Americans will be required to have health insurance or face a penalty of $95 for each adult or 1 percent of family income, whichever is greater. The penalty will increase In 2015 to $325 per adult or 2 percent of family income, and rise again in 2016.

• Something that sounds too good to be true probably is.

• Consumers who suspect fraud can lodge a complaint with the Marketplace Call Center (1-800-318-2596) which will be entered into a Federal Trade Commission database used by federal and state law enforcement agencies to track potential fraud activity. Federal law enforcement officials will be able to monitor complaint activity for trends within and across all 50 states. Also contact local, state, or federal law enforcement agencies or your state department of insurance.

SOURCE: U.S. Centers for Medicare & Medicaid Services, Pennsylvania Insurance Department, North Carolina Insurance Department.

When Jeff Lindstrom started buying health insurance-related Internet domain names a few years ago, he thought he was being a smart, creative businessman.

Lindstrom, an insurance broker who works in the Seattle area, bought 40-50 domain names and hit the jackpot with one choice: No, that’s not the state’s new health insurance marketplace. That’s Lindstrom’s brokerage site.

State officials are worried that Lindstrom’s site is confusing people searching for the real exchange site,, where people can shop for insurance or see if they qualify for federal subsidies under the new health care law.

They have a point, acknowledges Lindstrom, who has been an independent insurance agent since 2009.

“Our developers did an almost too good a job on our website,” he said.

It said “Welcome to the Exchange!” in big, bold print until the state insurance commissioner sent him a letter asking him to make some changes, which he did.

Stephanie Marquis, a spokeswoman for the Office of the Insurance Commissioner, said there’s nothing wrong with insurance brokers trying to drum up business around the new law.

Brokers can offer some much needed assistance sorting through the complex new system, but people should make sure brokers are licensed and reputable, Marquis said. The insurance commissioner’s website allows consumers to check for licensed brokers and whether they have had complaints filed against them.

The insurance commissioner’s website lists Lindstrom as a licensed broker with no investigations or disciplinary orders.

The insurance commissioner has issues with a few other sites with names similar to the official exchange: One is run by another insurance broker and one is run by a health insurance company. They all talk about health reform and offer to help people sign up for insurance.

The people who run the exchange say they didn’t buy all the related domain names because they couldn’t justify spending the money.

Lindstrom said he has talked to state officials about his site, but “I’ve never offered to sell, and they’ve never offered to buy.”

He hopes it will continue to bring in new customers, but he says he is not trying to confuse the public.

Brokers are paid monthly by insurance companies for bringing them business. That might not happen anytime soon for brokers like Lindstrom who are helping their clients sign up for new policies through the exchange.

Lindstrom received a letter the exchange sent to licensed agents saying the entire broker list may not be on the site until a month or so after the program’s opening, which was Oct. 1.

If Lindstrom wants to get paid, he’ll have to ask his clients to go back to the website and choose him as a broker after his name is added to the list.

Although some brokers have expressed concern that the new system will take away business, Lindstrom hasn’t found that to be the case.

Lindstrom said he’s working nonstop every day to walk his existing clients through the system and help new ones who approach him through the website.

“Health care reform has caused a lot of upheaval in the marketplace for consumers,” he said. “Whenever there’s a lot of upheaval or changes, brokers or agents get a lot of calls.”

Around the country

New Hampshire’s insurance commissioner sent a cease-and-desist letter last week to an Arizona company he accused of building a website to mislead health care shoppers into thinking it was the official marketplace. The site was taken down Friday.

Regulators in Pennsylvania also have told agents to change websites that seemed likely to convince consumers they were connecting to government-run sites. Connecticut’s insurance department warned agents and brokers this summer that it will take action against agents who mislead consumers or design sites to replicate the state-run exchange.

An organization run by the top insurance regulators in each state recently issued an alert on the potential for scams related to the marketplaces. The National Association of Insurance Commissioners advised consumers that bogus sites have been spotted and warned people to beware of unsolicited calls by people claiming they need personal information to help them enroll in insurance.

Not all insurance agents are licensed to sell insurance on the exchanges, and buying a policy from one of them could leave consumers without the tax subsidies that make the health insurance affordable. Consumers who seek an insurance professional’s help are urged to make sure they know who they’re dealing with.

“We all need to be on the lookout right now. We don’t want consumers to get confused,” said Jessica Waltman of the National Association of Health Underwriters, a trade association representing agents and brokers.

Susan Johnson, the Northwest regional director for the U.S. Department of Health and Human Services, said while some brokers are passionate about helping, others are seeking to take advantage.

In New Hampshire, offered free price quotes on insurance, but it wasn’t affiliated with the state or the federal government, which is running New Hampshire’s official online market. The site was taken down days after the state sent a cease-and-desist letter.

“It put itself forward as offering health insurance through the exchange, and consumers are naturally misled by that into thinking it’s the government site,” said Deputy Insurance Commissioner Alex Feldvebel.

The insurance department took action after getting a complaint from a small business owner who called a phone number on the misleading site.

“He called and ended up talking to someone who said, 'Unless you make a choice today, the price is going to go up,”’ Feldvebel said.

A man who answered the phone declined to comment at the company identified as running the site, Arizona-based Steffen Financial.

In Pennsylvania, a consumer law group this summer tipped off regulators about a licensed broker’s website that featured a logo mimicking the state seal and telling visitors: “Welcome to the Pennsylvania Health Exchange!” The broker took down a day after the state insurance department’s enforcement bureau called.

The top online search result using the terms “texas health insurance exchange online” is for Texas Health Insurance Exchange, which sells unsubsidized insurance policies. The broker who owns the website is Scott Thiltgen, a state-licensed insurance agent in Cedar Park, Texas. He said he’s also marketing on his Facebook page, Texas Health Insurance Marketplace.

Thiltgen said he’s not out to confuse consumers.

“It’s basically there to have someone they can talk to that knows about the exchange,” he said.

He said he’s earned the federal certification needed to sell subsidized policies on exchanges, and plans to start once the federal marketplace sorts out its glitches.

“Right now I’ve got a list of people that are ready to sign up for subsidized exchange plans, but can’t,” Thiltgen said.

While regulators have warned consumers, they don’t have any reports of people being cheated. The National Association of Insurance Commissioners and state agencies in Pennsylvania, Virginia and North Carolina report no complaints since the marketplaces launched on Oct. 1.

Those with industry experience warn whenever there’s money and confusion, consumers should be alert. Fraudsters saw opportunities when Medicaid Part D prescription drug insurance plans hit the market a decade ago, said Waltman, of the agents and brokers trade association.

“I think that we have to be concerned that this has happened a variety of times in the past,” Waltman said.

The first line of defense is checking whether a broker or agent is licensed by the state insurance department where they operate. Usually that can be done online.

The federal Centers for Medicare & Medicaid Services doesn’t have a similar option to check whether an agent has completed training necessary to work for consumers on a federally run exchange. The federal agency recommends consumers ask agents to provide a copy of the certificate showing they’ve completed training.

Some states that operate their own exchanges plan to identify marketplace-certified brokers, but that has not yet happened in all states, leaving a temporary gap for consumers. More than 2,600 state-licensed brokers cleared to work on New York’s exchange were expected to be listed on its website soon, the state’s health department said.

Still, spreading the word that subsidized health insurance is available and explaining how consumers should buy it leaves a legitimate role for brokers, Waltman said. Brokers earn commissions paid by insurance companies and not consumers.

Some brokers are under pressure to add customers because the commissions they earn on each policy are shrinking as the law rolls out.

Boise, Idaho, insurance agent Tom Shores estimates he’ll need to pick up 3,000 new customers to offset commissions cut to about $9 per policy each month. Shores estimates a quarter of his brokerage’s 4,000 existing health insurance customers also might learn they’re eligible for Medicaid, the government insurance for low-income people, once they enter their financial data into the exchange system.

“The only way we’re going to make money is to get more people,” Shores said late last month.

The two largest companies on South Carolina’s exchange are paying commissions of about $28 per policy per month for the first year, dropping to $14 a month after that, said John Adair, a broker in Greer, S.C.

“The law is complicated and making any sort of insurance purchase can be complicated — which plan to choose, deductibles, co-insurance, co-pays, network of providers,” said Adair, who built a website and licensed his business in states nationwide to capture new customers. “With what we’re seeing with the federal exchange, and some of the glitches, the agents themselves are very much in high demand.”