California considers forcing health insurers to pay commissions

California could become the first state to adopt rules that prevent health insurers from altering their sales commissions to discourage the enrollment of higher-cost customers, Kaiser Health News reports.

In an effort to curtail its mounting financial losses on its Affordable Care Act plans, UnitedHealth has halted commissions altogether for its ACA policies in most states where the insurer operates. Other major insurers, meanwhile, have stopped paying brokers for signing up customers outside of the standard enrollment periods and for selling gold plans, which tend to attract sicker enrollees.

Some experts have pointed out that taking steps to discourage enrollment of sicker, costlier consumers violates the ACA. Covered California Executive Director Peter Lee, who recently has criticized UnitedHealth's threat to leave the ACA marketplace, appears to share this view.

"We aren't going to let the old games of risk selection happen under the Affordable Care Act," Lee told KHN.

The state is developing a proposal--set to be discussed today at Covered California's monthly board meeting--that would require insurers to pay commissions during regular and special enrollment periods (SEPs) beginning next year, KHN reports. However, it would let insurers determine the exact commission amount.

Insurers have complained that abuse of SEPs has contributed to their eroding earnings in the individual market, and the Centers for Medicare & Medicaid Services has indicated it plans to tighten the rules that govern them. But some argue that discouraging use of SEPs will actually contribute to adverse risk selection on the exchanges.

Neither Anthem, the state's largest for-profit insurer, nor the California Association of Health Plans offered comment on the proposed rules governing commissions in the state, according to KHN. But insurance agents and a representative from the California Association of Health Underwriters said they'd welcome the new regulations, noting that agent commissions have declined steadily in recent years.

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