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NAIC Health Exchange Subgroup Adopts Model

The NAIC's Exchange Subgroup, chaired by Illinois Insurance Director Michael McRaith, approved its American Health Benefit Exchange Model Act during a conference call on November...
November 16, 2010

The NAIC's Exchange Subgroup, chaired by Illinois Insurance Director Michael McRaith, approved its American Health Benefit Exchange Model Act during a conference call on November 15. The purpose of this model act is to provide for the establishment of an exchange to facilitate the purchase and sale of qualified health plans in the individual market and to provide for the establishment of a Small Business Health Options Program (SHOP Exchange) "to assist qualified small employers in facilitating the enrollment of their employees in qualified health plans offered in the small group market."

The stated intent of the Exchange is to reduce the number of uninsured, provide a transparent marketplace, educate consumers and assist individuals with access to programs, tax credits and subsidies.

What It Means to Agents: PIA National is working with the NAIC and other interested parties to ensure the continued involvement of independent agents in the development and operation of exchanges.

PIA is concerned with how the SHOP Exchange is being perceived. While individual health insurance consumers will be directed to a website for health insurance exchanges where contacting an independent agent is an option, the structure of the SHOP Exchange too closely resembles that of an independent insurance agency. Facilitating the purchase and sale of health insurance policies by small employers is something that should be done only by licensed insurance professionals - not by government bureaucrats, and not only by representatives of the health plans selected to participate in the exchanges.

If the goal is to create a truly transparent marketplace, licensed independent insurance agents and brokers must be a big part of any SHOP Exchange. In addition, the use of the term "enrollment" creates the wrong impression. People are selecting insurance policies for themselves or their employees. They are not "enrolling," as in "enroll in a government program." What is being offered here is private sector insurance. This is not supposed to be Medicare or Medicaid, or a public option, so please let's discontinue the use of the word "enrollment."

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