In the unending ocean of choice and complexity of medical insurance, sailing your own ship is harder than it looks. Especially when you get a new job, age into Medicare, or turn 26 and thus can’t stay on your parent’s coverage. Every ship captain needs a helmsman—brokers are a major help for choosing a health plan, but they are best used as an insurance translator rather than your personal shopper. Learn the ropes of health plans from brokers, but don’t let them hijack your decision-making. Have them call out what’s ahead from the crow’s nest while steering the wheel yourself.
You might hear people refer to a health care broker and agent interchangeably. That’s a major point of confusion for many patients. Health insurance agents have agreements to promote and sell only one company’s plans. Although a firm like United Healthcare has many plans under its umbrella, agents do not have incentives to suggest alternatives that may serve you better. Brokers can tag in with however many companies they wish. Most brokers specialize to some degree. For example, a broker might only help patients with Medicare enrollment. In any case, you don’t pay these people directly. Both kinds of health care shoppers get commissions from the insurance plans themselves. Although more independent brokers are choosing to get paid only by insurance buyers, these deals are usually designed for larger clients.
The economics of selling health plans is the biggest con for hiring a shopper, whether you’re a patient or an employer. Companies incentivizing brokers to offer certain plans sounds OK on its face, but there’s a transitive property here. Insurance plans pay brokers and those commissions are reflected directly on insurance premiums. Then employers (and, by extension, you) pay those higher premiums. Agents representing only one insurance company tend to get other bonuses as well. Even brokers fielding dozens of plans may bill large clients separately for specialized advice. A rational broker offers plans with the highest bonus to them. This is a straightforward conflict of interest similar to the old days of pharmaceutical companies giving overt kickbacks to doctors prescribing certain medications. Employers and patients won’t know insurance pricing breakdowns unless they ask. So do request the fee schedule of whoever you end up hiring. Quotes for health plans themselves are not final to begin with, since most companies say their estimated premiums are ‘representative.’ You only discover a true cost once the official insurance application and underwriting finishes. Being aware of this bias lets you keep the broker as a spotter rather than a shooter.
Whether a rookie or master shopper is on your side, you need more than a quote. Because there are so many choices for plans, your broker should make side-by-side comparisons straightforward. Health insurance shoppers’ jobs are not finished after you buy coverage. Agents need to help you with renewal and customer service as needed. If you’re getting a plan from a company like Aetna, make sure to get contact info for the matching service rep who can answer your billing and coverage questions. If that all sounds complicated, that’s because it is—there’s a reason brokers have jobs. Buying insurance is convoluted enough that major exchanges have people called navigators. These are like agents but are paid by state and federal grants instead of insurance companies. Navigators aren’t required to be licensed in a given state and can’t promote one health plan over another—they’re like information desk staff at the mall or hospital. Navigators are just another layer of health care bloat. It’s better to have a competent yet biased agent than a navigator. Better yet, take advantage of the internet. Use website solutions like health insurance company pages, broker platforms, and purchasing alliances, so you don’t have to rely on your broker alone to keep up with every regulation.
Even with misaligned incentives, brokers are useful for walking you through health insurance’s foreign language. A number of Americans still don’t know what a deductible and out-of-pocket-max are. A broker can help bridge that insurance knowledge gap for you. Just don’t lean too hard on them—remember, they fight for the health plans’ money, not yours. There is nothing stopping you from going it alone as long as you have a clear idea of your needs. Ask yourself: how often do you need to visit general doctors and specialists? How attached are you to your current providers? Are you taking prescription drugs? Are those medications branded? Do you have a budget and need to add people to the insurance? Let your broker participate but not dominate the discussion of these factors. You’re effectively making your final health plan more expensive in exchange for personalized guidance. What matters is that you know this tradeoff exists. Let this knowledge put you ahead of other patients and employers. Let them do their job if you choose a broker or agent. Take recommendations in stride, but know that neither kind of insurance shopper can represent you. You or your employer are the final arbiters of what plan to use. A broker simply turns your choices into plain English. Stay focused and make sure that’s all your broker is doing.
Rushi Nagalla is co-founder of a dermatology practice.
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