ATLANTA—Health insurance exchanges, once considered a potentially big opportunity for credit unions to add a new line of business, have struggled and now find themselves in a state of limbo, according to one benefits expert.
And with uncertainly only growing due to the incoming Trump administration, how credit unions might proceed remains equally uncertain.
Annette Bechtold, SVP of regulatory affairs and reform initiatives at health benefits advisory firm One Digital, said the reasons for the lack of intertest are credit unions not wanting to add staff to manage the specialized business, and because the exchanges themselves are faltering—not working out as expected when the Affordable Care Act (ACA) was drawn up.
No Strong Connection
Approximately five years ago, as private health insurance exchanges were forming, many exchanges reached out to credit unions to become referral partners. CUs would get a fee for referring people to an exchange, and credit unions, seen as trusted advisors within their communities, would provide another needed service.
But Bechtold said that a strong connection between credit unions and the private exchanges failed to materialize because CUs were hesitant to hire a benefits expert.
“Credit unions had to hire a navigator-type person, trained and authorized by an exchange to act on their behalf to enroll individuals,” explained Bechtold.
Annette Bechtold
As Republican opponents of the ACA—as well as news reports—have indicated, health insurance exchanges have stumbled.
A key problem with the ACA, acknowledged Bechtold, is that the number of young people—who do not consume much in the way of healthcare resources—signing up for healthcare plans has fallen considerably short of projections. That lack of low-cost consumers combined with the higher number of high-cost people with pre-existing conditions, has been a considerable drag on profitability, and has led many providers to exit the healthcare exchanges created by the ACA.
“That exit of insurance carriers has led to a lack of choice within the exchanges,” said Bechtold. “The issue is that a lot of carriers are simply not offering, or will not continue to offer, products through the exchanges. So choice for consumers who use an exchange is very limited. Right now in one-third of counties in the country, Americans will have only one carrier choice within an exchange.”
She said that limited choice has led to high premiums and out-of-pocket costs.
“The exchanges were supposed to drive competition and lower costs, but now they are offering less choice and higher prices than what Americans had before the ACA,” said Bechtold.
Carriers Dropping Out
Bechtold added that carriers are also dropping out of exchanges because it has been difficult, and too costly, for their legacy data systems to effectively interface with exchange systems, without a person stepping in during an enrollment.
“A lot of the carriers’ systems are huge monstrosities, and they are older,” explained Bechtold. “It has been very difficult for the two sides’ systems to talk to each other.”
But had credit unions jumped in with both feet and began offering access to exchanges, that line of business could come crumbling down as Republicans move to dismantle the ACA. Prior to his election, President-elect Donald Trump said that among the first things he will do is repeal the ACA, although he recently slightly softened his stance.
Bechtold believes Republicans will seek to dismantle the ACA piece by piece.
“And they won’t repeal every provision of the Affordable Care Act,” she said. “I think a number of things will stay. For example, people with pre-existing conditions might not be precluded from coverage, as long as they were to keep continual coverage . . . Again, the Republicans will dismantle the ACA slowly, taking a lot of time with each decision.”