Alaska broker makes big move under Affordable Care Act

rmauer@adn.comSeptember 28, 2013 

The Parnell administration's decision to cede the Affordable Care Act's insurance marketplace to the federal government created a wide opening for a brokerage in Anchorage to create a new business connecting uninsured Alaskans to medical coverage.

Enroll Alaska, an affiliate of Alaska-based Northrim Bank, has a website and is setting up agents around the state, including at kiosks at every Wal-Mart and Sam's Club and at hospitals and clinics. Its retail blitz will start with the opening of Obamacare enrollment Tuesday.

"It's been identified there's 66,000 uninsured Alaskans," said Tyann Boling, the newly hired chief operating officer of Enroll Alaska. "We want to reach out to 40,000 of them this year if we can."

Boling said Gov. Sean Parnell's announcement in 2012 that he would not create a state-run insurance exchange or marketplace, where individuals and small businesses could shop for policies, created a void for Enroll Alaska. The federal government is stepping in, as it has in the 26 other states where governors have refused to participate, but the federal marketplace isn't nearly as comprehensive as in the states that have created their own, she said.

"We did not receive all that government funding that the states that elected to develop their own marketplace did," Boling said. "Therefore, the outreach and enrollment and education has been much smaller and that's why Enroll Alaska has been able to come on and to really be that solution for Alaskans, and reach out across the state and put this into place on a very large scale."

Boling said she's been surprised by the misunderstandings she's heard in her travels around Alaska. One person thought the state was exempt from the Affordable Care Act. "I was like, well, it's federal law," she said.

"There is a huge population of Alaskans that is going to receive a great benefit on being able to have access to health insurance that is little or no cost to them and their families," she said. "That is truly what Enroll Alaska's mission is -- to go out and to educate and inform all Alaskans on how this law affects them and to get our uninsured population insured so they have access to health insurance for the first time."

'THEY SAW A MARKET NICHE...'

The federal government has given grants to two nonprofits to act as trained "navigators" in the marketplace, United Way of Anchorage and the Alaska Native Tribal Health Consortium. They can help consumers get acquainted with the new law, learn if they qualify for subsidized insurance, and help them enroll in policies if they feel they can do that on a website.

But if a consumer asks, "which policy should I buy?" the navigator is barred from answering directly. Enroll Alaska agents, also trained and certified by the federal government, have no such restriction. The agents can also sell insurance outside the marketplace, say from Aetna, but a consumer couldn't receive a tax credit for such a policy.

Michele Brown, president of United Way of Anchorage, said there's a place for both navigators and agents.

"They saw a market niche and have gone into it with gusto," Brown said of Enroll Alaska. "From my perspective, the more people trying to get people connected to information and coverage, the better."

The profit side of the Enroll Alaska operation, unlike grant-reliant navigators, runs on commissions from the two insurance companies participating in the marketplacein Alaska, Premera Blue Cross Blue Shield of Alaska and Moda Health of Portland, Ore. Premera pays a $25 monthly commission for each person enrolled; Moda pays 6 percent of the premium, Boling said.

While other insurance brokers say they will be participating in the Affordable Care Act's federal marketplace, none have come close to the effort by Enroll Alaska, a division of Northrim Benefits Group. Enroll Alaska was registered with the state corporations office in June. Boling was hired from a large village Native corporation about five months ago.

Once Congress agreed that its comprehensive health-care legislation would rely on private health insurance and not a single government payer like Medicare, Congress and the Obama administration have encouraged the involvement of private insurance brokers as well.

"The bank is not endorsing Obamacare, we're saying that's the law of land," said Joe Beedle, president of Northrim Bank, which, with its partners in Northrim Benefits Group, have invested "more than a seven-digit number" in Enroll Alaska.

The new division represents a big leap for Northrim Benefits Group -- its traditional clients are Alaska businesses and nonprofits, often banking customers, seeking medical coverage and other perks for employees. Beedle endorsed the broad scope of Enroll Alaska.

"Tyann and the whole team there are so dedicated to education," Beedle said. "Yes, it's a business model, but the business model won't work if we don't invest in education."

RISKY INVESTMENT?

One big risk for the bank's investment is the threat that Congress would kill or defund Obamacare, a relentlessly stated goal of Republicans, including Alaska Sen. Lisa Murkowski and Rep. Don Young.

Beedle and the three other top officers of Northrim Bank, in fact, overwhelmingly support Republicans, according to state and federal campaign reports.

Since July 2011 in state elections and 2009 in federal elections, the four top officials of the bank and their spouses made 75 reportable contributions to candidates and political parties. Of those, 70, totaling $16,850, went to Republicans or the Republican Party and four contributions, totaling $650, went to local candidates who did not declare a political affiliation. Joe Schierhorn, one of the bank's two executive vice presidents, was the only top officer to give to a Democrat in that period, and his $100 check went to Rep. Lindsey Holmes, who switched from Democrat to Republican after the 2012 election.

The bank's bet is that the Affordable Care Act will continue, Beedle said, but it's not a sure thing.

"It's not yet a probability that it will be a good investment. It is a business venture risk that does in fact have a lot of risk -- that's why we're not aware of other people entering the market," he said.

In fact, Obamacare has to work all across the country for it to succeed, Beedle said.

"It's an overwhelming commitment, obligation, challenge, opportunity, and it won't work if they don't get everybody enrolled, and or get an awful lot of people enrolled," he said.

The history of earlier insurance exchanges -- the famous one of Gov. Mitt Romney, in Massachusetts, and a less well-known attempt in California -- led Congress to ensure a place for agents and brokers, said Sabrina Corlette, a research professor at Georgetown University's Public Policy Institute.

"If you want to have a successful exchange, you need to get buy-in from agents and brokers; if you don't, they can undermine the long-term success and viability of an exchange," she said in a telephone interview from Washington, D.C.

'A VERY STRONG LOBBY AT THE STATE LEVEL'

In California in the 1990s, brokers were unhappy with the exchange and they steered healthy clients away from it, leaving too many people with high medical risks and expensive claims to insure, Corlette said.

Early on, some experts thought that the marketplace websites of the Affordable Care Act would push insurance agents to the margins, like travel agents, she said.

"As it turned out, if that's the case, it's going to be a long process," Corlette said. That's primarily because the Affordable Care Act left many policy decisions to the states.

"I've gotten an education in the last three years," she said. "Agents and brokers have an extraordinary amount of political power in their state legislatures. Often they are state legislators. They're very, very active members of their community, they contribute a lot of political donations. They're a very strong lobby at the state level. I don't think they're going anywhere anytime soon."

Another expert, Prof. Timothy Jost of the Washington and Lee University Law School in Lexington, Va., said the federal government is encouraging brokers and agents to sell coverage through the marketplaces.

"The basic attitude is: please come help, you're welcome, the more the merrier. Agents and brokers, this is their business," Jost said in a phone interview.

At the same time, at least one national insurance association, along with congressional Republicans, tried to get the navigator program shut down, claiming "these people are terrible, they're going to steal money, commit identity fraud," said Jost, a consumer liaison with the National Association of Insurance Commissioners. Jost said those assertions were overblown and likely prompted by fears that navigators would compete with agents. But the broad criticism has made the navigator program vulnerable.

"I don't think they're going to be competition," Jost said of the navigators. "They're not there to sell insurance, they're there to help educate people and help to get people signed up. They don't get any commissions."

Here, though, Enroll Alaska is working with navigators and sees them as allies, said Boling.

"The navigators have a great role," Boling said. "This is a huge state. The more people can get educated and informed on this, the better. We're just here to support our navigators and to support the nonprofit organizations in any way that we can to help them be successful."

ESTIMATE: 21 PERCENT OF ALASKANS UNINSURED

The number of uninsured Alaskans varies from source to source, in part because of questions about how to enumerate Alaska Natives who don't have insurance but who have many medical needs met by the Indian Health Service. The U.S. Department of Health and Social Services estimates that 21 percent of the state's population -- 139,422 -- are uninsured and eligible to get insurance through the marketplace. The U.S. Society of Actuaries, an insurance-related organization, estimates the Alaska uninsured at 20.6 percent. The 66,000 uninsured cited by Boling does not include Alaska Natives.

Some of those people might qualify for Medicaid, especially if Gov. Parnell reverses an earlier decision and accepts federal money for Medicaid expansion, another part of the Affordable Care Act. If he does, 91 percent of the uninsured would qualify for either Medicaid or for tax credits to subsidize their insurance, HHS says.

The law offers a sliding-scale tax credit to those in the individual insurance market with an annual income of up to four times the federal poverty line. In Alaska, the 2013 poverty guideline is $14,350 for an individual, $29,440 for a family of four, meaning insurance premium subsidies would available for an individual with an income up to $57,400 or a family of four of $117,760.

Holly Parsons, the vice president for marketing at the Wilson Agency, an insurance brokerage in Anchorage, said it's not only incentives that will bring the uninsured to the marketplace, but the penalties. For the first year, the penalty for remaining uninsured is set low -- $95 or 1 percent of a person's modified adjusted gross income, whichever is greater. The penalties rise substantially in ensuing years.

Because there's a three-month lag between the Oct. 1 start of open enrollment and the first day of coverage on Jan. 1, and this year's special enrollment extension to March 31, 2014, Parsons figures enrollment will start slowly, and that a significant number of uninsured Alaskans will opt for the low 2014 penalty rather than pay for a policy. (To have a policy in force by Jan. 1, a consumer must enroll and pay for it by Dec. 15.)

"We're a last-minute kind of town," said Parsons, whose agency expects to establish an enrollment program, though not nearly as big in scope as Northrim's. "It gives people lots of time to learn what's required, all the forms, about the resources that are out there, and for the different agents in town to handle the incoming traffic."


Reach Richard Mauer at rmauer@adn.com or 257-4345.

 

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