Doctor's office image via Shutterstock.
The National Association of Realtors has launched a private health insurance exchange with plans that comply with the new health care law, offering hundreds of thousands of uninsured and underinsured Realtors an alternative to the problem-riddled federal website.
The Patient Protection and Affordable Care Act, popularly known as “Obamacare,” has the potential to affect up to 700,000 NAR members — those without health insurance, and those who buy it on the individual market.
The vast majority of Realtors, whether independent contractors or salaried agents, do not get health coverage from their employer. According to NAR’s 2013 Member Profile, only 4 percent of Realtors reported receiving health insurance through the brokerage their license is associated with.
About 1 in 3 Realtors (34 percent) said they pay for health coverage out of their own pockets, while about 1 in 4 (27 percent) said they received their health insurance through a partner, spouse or family member.
More than 1 in 3 Realtors (36 percent) did not have health insurance at all. Extrapolated to NAR’s 1 million-member base, that’s an estimated 360,000 Realtors without health insurance. Under the new law, most will be required to obtain health insurance or pay a penalty.
For those who already have health insurance through their employer or through Medicare or Medicaid, their coverage will not change under Obamacare.
But for the 10 million to 15 million people who buy health insurance on their own — including approximately 340,000 Realtors — their health care plan may change if it does not meet certain minimum requirements. Even if their plan won’t change, many in this group may choose to shop around and compare the new Obamacare-compliant plans for the best deal.
In order to address that need, earlier this year NAR launched its “Realtors Insurance Marketplace,” described as an exclusive ”one-stop” insurance shopping site, in partnership with national insurance brokerage firm SASid (Smart And Simple Insurance Development).
SASid is responsible for creating and managing NAR’s other health insurance plans and products, including its Realtors Core Health Insurance (offered since May 2009) and its Realtors Dental Insurance (offered since July 2010), as well as Drug Card America, its free discount pharmacy drug card. These were previously offered as stand-alone products through SASid, but the marketplace now houses all of NAR’s health insurance programs.
This includes two products also launched in May: a major medical health insurance exchange for NAR members and short-term insurance designed to be an affordable temporary major medical policy. While the core insurance is a limited plan that covers only everyday illnesses and accidents, these plans are designed to offer more comprehensive coverage.
‘Gauranteed issue’ plans launch Friday
NAR’s major medical health insurance exchange, which the trade group has dubbed the “Members Health Insurance Exchange,” currently offers health plans that are fully underwritten, meaning members have to qualify for the plans and their health status will be taken into account.
But starting Friday, the exchange will be updated with “qualified health plans” that fulfill the health care law’s criteria, and which will be offered on a “guaranteed issue” basis, meaning health status will not be a factor.
The exchange includes a tool that will allow members to determine whether they are eligible for a government subsidy — subsidies are available only for plans purchased through a public exchange — and recommend whether to continue through the Realtor exchange or go through the national public exchange, healthcare.gov.
In general, Realtors whose household income is less than 400 percent of the federal poverty level will qualify for the Affordable Care Act subsidies, also called health care tax credits.
Around half of those in the individual market will be eligible for a subsidy. Regardless of Realtors’ eligibility, SASid’s licensed benefit specialists will be on hand to guide them through the process, whether that process is on NAR’s private exchange or a federal or state public exchange.
“The association’s goal is to provide benefits to members and, with the subject of health care, our goal specifically is to offer a trusted source where they can go for consultative advice on the confusing, ever-changing insurance landscape and ACA — and how it pertains to their personal circumstances,” said Kristin Maurelia, NAR’s managing director of strategic alliances.
“Our provider will share options, including public/government exchange options and/or the Member Exchange options, depending on individual circumstances, and will have the ability to enroll them. So, this Members Health Insurance Exchange is also designed to ultimately provide expanded or alternative carrier and plan options versus what members may find on the public exchanges, in addition to a much easier, seamless ‘shopping’ experience.”
The federal government’s health insurance website, healthcare.gov, has been plagued with glitches since its launch on Oct. 1. The website was supposed to help uninsured and underinsured Americans compare and sign up for comprehensive health care coverage, as required by the Affordable Care Act.
But the site has been overrun with technical problems that are not expected to be resolved until the end of November. While 15 states have rolled out their own exchanges, those have gotten mixed reviews.
“If you’re not going to get a subsidy I wouldn’t really recommend going through that [public exchange] process because it’s a long process today. Unless they make it faster,” said Shannon Kennedy, president of SASid.
In addition to the technology-related delays, healthcare.gov does not allow people to compare plan costs until they answer a litany of questions, which has caused frustration for some, Kennedy said.
“People have struggled. I think initially everybody wanted to window shop because [the] effective date [for coverage] is Jan. 1,” Kennedy said. “Not many people buy coverage that far in advance. I think most activity is going to happen in November and December.”
NAR exchange not pushing particular plans
With NAR’s exchange, Realtors will be able to window shop and, because there will be no underwriting process for qualified health plans, they’ll be able to purchase “in as little as 10 minutes because the application process is going to be so simple,” Kennedy said.
Neither Kennedy nor Maurelia knew whether the government website’s troubles have spurred more Realtors to turn to NAR’s marketplace instead.
So far, tens of thousands of participants, including Realtors and their family members, are enrolled in one or more of the programs offered in the Realtors Insurance Marketplace, according to Maurelia. She declined to say how many have participated in the major medical health exchange launched in May.
NAR receives royalties for the use of the Realtor mark in connection with the marketplace, just as it does for any other member benefit program, Maurelia said. She said that the royalties SASid pays don’t affect plan rates in the marketplace.
SASid works with other trade groups to set up similar programs, but Kennedy said NAR is its biggest partnership. There is no charge to Realtors for participating in the marketplace. As an insurance brokerage, SASid receives marketing commissions from insurance companies for helping NAR members access the companies’ health insurance.
“These commission rates are set by the insurance companies, but the government has said so much can only be used for administrative and marketing costs. Whether you buy through a public or private exchange, the commission is set,” Kennedy said.
“Independent agents, they have the ability to shop through public and private exchanges,” he said. “There is no advantage to shop through healthcare.gov or through the Realtors Insurance Marketplace,” though the latter may have more choices because some insurance companies have decided not to participate in the public exchanges.
Unlike the “navigators” or “assisters” hired by community groups and government agencies to provide impartial guidance to those signing up through the public exchanges, SASid’s representatives can offer advice on which plan to choose.
“When you go through the public option they are instructed not to help you select a plan,” Kennedy said. “Sometimes the cheapest isn’t always the best strategy for you, sometimes it is. We play a very significant role in consulting people with their health insurance and helping them understand and helping them through that process whether it’s public or private.”
SASid can also offer information on other insurance plans such as group dental insurance or supplement plans, he said.
Maurelia and Kennedy said the objective of the exchange is not to sell Realtors on a particular insurance plan, but to guide them through the process.
“As you can imagine, the ACA implementation and exchanges are a moving target, so information is changing daily,” Maurelia said. “We’re glad to be partnered with a group who truly has the members’ interest in mind and is on top of these changes — in fact, ahead of many of them so that the NAR program is able to leverage whatever opportunities there may be for our members’ benefit.”
Through the Members Health Insurance Exchange, Realtors will be able to compare major medical plans; sort by price, plan design, co-pays and other factors; and enroll. The exchange will include health maintenance organizations (HMOs), preferred provider organizations (PPOs), high-deductible catastrophic plans, and plans that qualify for health savings accounts.
Upon launch, there will be plans available from Aetna and UnitedHealthcare, and possibly some from Coventry and Blue Cross Blue Shield, Kennedy said.
“Every month there will be carriers being added,” he said.
Plan rates will based on location, age, and whether the member is a smoker or nonsmoker, but not on whether the member is healthy or has a pre-existing condition. How much rates will change is unclear because the new plans will not be an “apples to apples” comparison with the old plans, Kennedy said.
Qualified health plan minimum requirements
The new, qualified health plans will be required to cover 10 “essential health benefits.”
These include prescription drugs, outpatient care, rehabilitative and habilitative services and devices, emergency room visits, hospitalization, lab tests, maternity and newborn care, preventative services and chronic disease management, mental health and substance abuse treatments, and pediatric services, including dental and vision. In order to be certified and offered through the public health insurance marketplace, insurance policies must cover these benefits.
The law also requires that insurers spend at least 80 percent of subscriber premiums on medical care; the remaining 20 percent can be used for administration and profits.
These minimum requirements are behind the millions of cancellation notices that those in the individual market have been receiving from their insurance providers. The notices inform policyholders that the insurer will no longer be offering their particular policy and what other plans, that do meet the requirements, will be available.
Some plans — those in place in March 2010 when the Affordable Care Act became law — will be “grandfathered in” as long as they don’t change much. But both insurers and consumers tend to change their plans every year, so grandfathered plans are in the minority and on their way out.
“These requirements are all good things in the sense that they help make sure you have access to quality coverage and can’t be turned down because of your age or health status,” said Realtor Magazine senior editor Robert Freedman in a blog post.
Nonetheless, because the new plans will generally provide more coverage, they will also generally cost more.
“Carriers have expressed that rates will increase but [it's] hard to give a percentage due to plan changes and that it is based on demographics,” Kennedy said. “My feeling is that people will see and feel a sticker shock doing their own comparisons (current plan vs. QHP plans).”
The Members Health Insurance Exchange will continue to offer fully underwritten policies until the last available effective date, probably Dec. 15, he added. These policies will likely be cheaper than the guaranteed issue plans because insurers will be allowed to consider health status, Kennedy said.
Some members may opt to pay the penalty for not buying a qualified health plan and still keep their existing plan or buy a fully underwritten plan because it will be more affordable, Kennedy noted.
“Because if you go through the underwriting, a plan could be $100 a month, but a similar QHP plan would cost $200 per month,” he said.
That $1,200 yearly difference would dwarf the penalty that most people, with some exemptions, are required to pay if they don’t buy health coverage that meets the minimum requirements.
For 2014, the penalty, or “individual shared responsibility payment,” is $95 per person or 1 percent of a household’s yearly income, whichever is greater. The payment is due by April 2015 when filing for 2014 taxes. The fee will rise every year and in 2016 will be 2.5 percent of income or $695 per person, whichever is greater.
Over on the Raise the Bar in Real Estate Facebook page, several real estate professionals complained that the Affordable Care Act had caused their insurance rates to go up, or that the premiums for the new plans were unaffordable.
“I will not be using an exchange. Send me the tax. If I get seriously ill, then I suppose I will get coverage, since you can no longer be turned down for a pre-existing condition. That’s the most affordable way for me,” said Mary Linthicum, a Realtor at Coldwell Banker Residential in Bethany Beach, Del.
Wayne Harriman, managing partner at Harriman Real Estate, said paying the penalty would be cheaper for his family than paying the lowest monthly premiums they could find.
“We are FAR above the threshold for subsidized coverage. Our premium would be $16,404 a year. Our penalty for not signing up for coverage? About $2,000, give or take. At least in 2014. It would go up in subsequent years,” he said.
But some said they had had success signing up through state exchanges.
“We’re using the Maryland State Exchange and, while my wife, who is a student, was informed that her Aetna plan would no longer be available, we found it to be a handy way to consolidate our insurance under one company … At almost no additional expense for us and our two boys,” said Daniel Finn Metcalf, a Realtor at Long & Foster.
Atieno Williams, broker-owner at DC Home Buzz, said Washington, D.C.’s exchange did not face the same challenges as the federal site.
“I am switching from my current individual plan. It is a little more money, but I am also getting lots more coverage and not as severely underinsured as I was,” she said.
Inman News columnist Teresa Boardman, a broker in St. Paul, Minn., has said NAR’s insurance marketplace is worth a look and plans to compare the rates and benefits of plans offered through NAR’s marketplace with programs offered through Minnesota’s health exchange.
Affordability may not be the only consideration in evaluating whether to obtain health insurance, however.
Michael DeFilippi of Mega Model Management and Global Luxury Realty has NAR’s dental insurance, which he said is “great,” but that he has no interest in health care.
“I work out and eat well,” he said.
NAR will hold a presentation on the Members Health Insurance Exchange at NAR’s booth theater at its annual conference on Saturday morning. Kennedy and other staff will also be available at the Realtors Insurance Marketplace booth in the Realtor Pavilion to work with members.