Advocates say insurance agents should not control Iowa's new health insurance exchange

With millions of dollars on the table, Iowa needs transparency and fairness in its new health insurance exchange to protect consumers, according to an advocacy group of patient organizations.

Representatives of Iowa Health Advocates say those consumers need to be central to the governing body of the new exchange, rather than allowing insurance agents or brokers to run the show.

Agents and brokers with a financial interest in the exchange have a direct conflict of interest, said Erin Seidler, state lead for Know Your Care Iowa, one of more than 30 groups represented in Iowa Health Advocates.

Their expertise could be used in an advisory board to provide guidance to the governing body of the exchange, Seidler said during a meeting Thursday with The Gazette Editorial Board.

An option should be available for consumers to go through an agent or broker to buy insurance on the exchange, rather than charging a transaction fee to give agents and brokers a percentage - one of the ideas that has been proposed, she said.

About 500,000 Iowans are expected to participate in the new health insurance exchange, a marketplace where individuals and small businesses can shop for health care coverage and receive subsidies. Another 570,000 Iowans will be covered under expanded Medicaid.

Under the Affordable Care Act, each state is required to enact legislation to establish an exchange before Jan. 1, 2012, or the government will step in to establish a federally operated exchange.

“It's kind of a crapshoot,” Peggy Huppert, Iowa government relations director of the American Cancer Society said of the design of a federal exchange.

But Iowa Health Advocates members said a federal exchange would be preferable to one in Iowa that does not include transparency and other principles they support.

That includes a governing body held accountable through open meeting laws.

Huppert said the Iowa Legislature should not wait to approve an exchange in a last-minute deal behind closed doors.

“Health insurance is big business,” she said, making a quick estimate of $15 million that could change hands with more Iowans insured under the exchange.

Paul Pietzsch, executive director of the Iowa Health Buyers Alliance, said the Iowa Exchange should allow consumers to have a true apples-to-apples comparison of insurance plans.

The state exchange could even the playing field for small businesses that cannot afford insurance for its employees, he said.

Already, 10 states have passed legislation to establish insurance exchanges and 25 are considering legislation this year.

Despite receiving a $1 million planning grant and a $7.7 million implementation grant for a health insurance exchange, Iowa has done little to make progress, Seidler said.

Some legislators are waiting for the outcome of a U.S. Supreme Court decision on the individual mandate to purchase insurance, but by the time the decision is known in July, it will be too late, she said.

Iowa's legislative session is scheduled to end April 17.