Health Care Service Corp., Anthem cut commissions for individual plans

Following in the footsteps of some of the country's largest payers, several Blue Cross and Blue Shield (BCBS) insurers have said they will cut back on sales commissions for Affordable Care Act policies, according to a Forbes post.

In December, UnitedHealth stopped paying commission to agents for selling ACA policies in most states where it operates amid the insurer's effort to stem its losses in the individual market. More recently, insurers including Aetna, Cigna and Anthem said they would stop paying commissions for plans sold outside of standard enrollment periods, and Cigna and Humana stopped paying commissions for gold-level exchange plans.

Covered California Executive Director Peter Lee has indicated he wants to force insurers to pay commissions on ACA policies to prevent them from engaging in what he calls "the old games of risk selection."

Now, effective April 1, Anthem is eliminating commissions for individual plans sold in Georgia, Indiana, Missouri, Nevada, New Hampshire, New York, Ohio, Maine, Virginia and Wisconsin, Forbes contributor Bruce Japsen writes. Anthem's fourth-quarter net income fell 64 percent, the insurer reported recently, mainly due to ACA-related losses.

Health Care Service Corp., which owns Blues plans in five states, also said that on April 1 it will eliminate broker commissions for new on- and off-exchange individual plans, according to the Forbes post.

A report out this week from Fitch Ratings says it expects all the BCBS companies' earnings to decline for 2015 amid higher-than-expected cost and utilization trends on the state health insurance exchanges.  

Health Care Service Corp. noted it will re-evaluate its commissions policies for new ACA plans effective Jan. 1 of next year, and Anthem said in a statement that it "is committed to the public exchange market and the adjustments in our broker commissions do not reflect and should not be interpreted as a change in our support for this market," the Forbes post says.

Aetna CEO Mark Bertolini has struck a similarly optimistic tone, saying at a recent conference that "we believe we have an obligation to stick it out" in the individual market. Yet UnitedHealth's CEO has said "we can't really subsidize a marketplace that doesn't appear at the moment to be sustaining itself."

To learn more:
- read the Forbes post

Related Articles:
Fitch expects BCBS companies' 2015 earnings to fall
California considers forcing health insurers to pay commissions
UnitedHealth halts sales commissions for ACA policies
Insurers move to stem ACA losses--but at expense of consumers?
Individual market struggles drag down Anthem's Q4 earnings

Suggested Articles

Insurance company Oscar hired former Uber talent as its chief executive officer, Jonathan Bush gets a new gig at Firefly Health and more.

Fourteen doctors and other medical professionals were among those charged in fraud cases that totaled $258 million in California, Oregon, and Arizona.

House Speaker Nancy Pelosi released a plan to give Medicare the power to negotiate for lower drug prices, but will it get out of Congress?