Why Health Insurance Agents in California Matter

by John Hansen

CA Agents Offer Expert Service, But Are Leaving the Market Due to Decreasing Commissions

Since the passage of the Affordable Care Act (ACA), health insurance agents in California have had to fight for their livelihood. Commissions have dropped. Some top leaders in health care have questioned whether or not insurance brokers would even be needed.

At the CAHU Summit 2016 on May 17-18, agents converged on Sacramento California to speak to state Congressman to make the case that agents are necessary.  They argued that California consumers are struggling to understand all the complexities of health care and insurance. The California health insurance agent makes it so much easier to comprehend.

Agents Are an Effective Tool

Michael Lujan, President of the California Association of Health Underwriters, argued, “Agents are a more effective tool at providing insurance to consumers.” Health insurance agents in California explain the benefits and help consumers with enrollment.

Agents are an effective and a cost effective tool. They explain doctor networks, and help the insured know how to find doctors in their network. Often, they have to explain how health insurance will affect a client’s taxes as well.

“72% of agents spend a lot of time explaining benefits,” says Lujan. Insurance brokers help clients get lower prices, and consumers are more satisfied when a California health insurance agent gets involved. President Lujan recommended viewing the CAHU White Paper for additional details regarding the value of health insurance agents in California.

The Affordable Care Act Created a Greater Need for Agents

The ACA has created more of a need for health agents in California. The industry and the details got more complicated. Applications changed. Income and tax information became an important part of health care insurance enrollment in California.

However, compensation has been drastically reduced California health plan brokers. One California health plan is paying only $12/month. Another carrier, Kaiser Permanente, only pays a one-time fee of $100 and then $50/year for renewals after that. Another insurance company has stated that it will not pay commissions outside of Open Enrollment, so agents who sell those plans during the Special Enrollment Period will be working for free. With commissions this low, licensed California agents have to be careful or they’ll be making minimum wage selling health insurance.

Commissions are so low that many health insurance agents in California are reconsidering their careers. Low commissions are causing the experts to get out of the market. Ultimately, this could hurt California consumers who so desperately need the assistance of knowledgeable insurance agents.



Not sure how Obamacare affects your health care plans in California? Learn how the ACA works in California, including benefits, costs and enrollment.

Covered California is the Golden State’s official health exchange marketplace where individuals, families and small businesses can find high-quality, low-cost California government health insurance.

Learn about Obamacare income guidelines in California using our income limits chart, and see if you’re eligible for government assistance.

Learn about the Covered California website. Find easy online enrollment. Set up your account, log in, buy insurance and more on the California health marketplace website.