Before you trust a health insurance broker: the questions that sort good from bad

Eight questions that tell you most of what you need

Before you work with a health insurance broker, ask whether they are licensed in Texas, how many carriers they can quote, how they are paid, how they compare plans beyond the premium, and who helps you after you enroll. Then ask whether they ever tell people to keep the plan they have. Check the license yourself with the Texas Department of Insurance. A good broker answers all of this without hesitation and is glad you asked.

I am Rex Slover of Slover Agency, and I broker group health and benefits for employers, individual and family plans, and Medicare coverage from Murphy, northeast of Dallas. I would want anyone shopping for coverage, including my own clients, to ask these questions of every broker they talk to.

• Are you licensed in Texas for health insurance?
• Do you represent one company or several, and which ones?
• How are you paid, and does using you change my premium?
• How do you compare plans besides the monthly price?
• Will you check my doctors and prescriptions before recommending a plan?
• Who do I call when a claim is denied or a bill looks wrong?
• Have you ever told a client to stay with the plan they had?
• What do you need from me, and how long will this take?

Agent, broker, captive, independent: what the words mean

The labels confuse people, so start here. The Texas Department of Insurance explains that captive agents sell policies from one company only, while independent agents sell for multiple companies. HealthCare.gov puts it in similar terms: agents may work for a single insurer, brokers may represent several, and some may not sell plans from companies they do not represent.

Neither model is dishonest. A captive agent can know one carrier's products well. But a captive agent can only tell you what that one carrier offers, and if another carrier has the better plan for you this year, you will not hear about it. When I say I compare quotes across BlueCross BlueShield of Texas, UnitedHealthcare, Aetna, Cigna, Humana and others, that is the practical difference. Ask any broker for the actual list of carriers they are appointed with, not a vague answer about having access to the market.

Ask how they are paid, and listen for a straight answer

HealthCare.gov states that you will not pay anything additional if you enroll with an agent or broker, and that insurers typically pay them commissions. That matches how my agency works: my services cost the client nothing, because the carriers pay the broker. The premium for a given plan is the same whether you buy it through me or directly.

The follow-up question is the important one: does the broker earn more on some plans than others, and how do they keep that from steering the recommendation? You will not always get a detailed answer, but you will learn a lot from how the person handles being asked. Anyone proposing a separate fee to you should explain exactly what it buys.

It also helps to ask what happens to the relationship after the first year. Some brokers are attentive at the sale and hard to find at renewal. Since the carrier keeps paying the broker while your plan stays in force, you are entitled to service for as long as you keep the coverage, and a good broker treats it that way.

Questions about how they compare plans

A broker who only sorts plans by premium is doing something you could do yourself. TDI's health coverage guide advises comparing several quotes and coverages and checking that your doctors and medications are covered, since a plan will not pay for drugs that are not on its approved list. A good broker does that work for you and shows it.

Ask the broker to walk you through one comparison out loud. You should hear them talk about these points without being prompted.

The last point matters most. A plan with a lower premium and a higher deductible can be the better deal for a healthy person and the worse deal for someone who sees specialists every month. A broker who asks about your actual year of care, and runs the numbers both ways, is giving you advice. One who skips that step is giving you a price list.

• The deductible, coinsurance and out-of-pocket maximum, not just the premium
• Network type, HMO, EPO or PPO, and whether your doctors are in it
• Which hospitals are in network, if you have a preference
• How your regular prescriptions are covered on each plan's drug list
• What a typical year of your actual care would cost on each option

What a good answer sounds like

Good answers are specific. Asked about carriers, a good broker names them. Asked about pay, they explain it plainly. Asked whether they have ever told someone to keep their current plan, they can describe when and why, because a fair renewal or a plan that already fits is a common outcome of an honest review. Asked what they need from you, they give a short, concrete list.

Vague answers are a signal. If a broker cannot explain the difference between two plans in plain language, they probably cannot explain it to your employees or your spouse either, and you will be the one fielding the confusion later.

Pay attention to the questions the broker asks you, too. Someone who wants to know about your doctors, your medications, your budget and what frustrated you about your last plan is building a recommendation around you. Someone who jumps straight to a quote after hearing only your zip code and age is selling whatever is easiest to sell.

Extra questions if you are buying for a business

Employers should ask whether the broker will present level-funded, self-funded and PEO options next to fully insured plans, or only one kind. Ask whether they will run enrollment meetings for your staff, handle the carrier paperwork, and help an employee with a billing problem in the middle of the year. Ask how they handle employees who are approaching 65, because the interaction between your group plan and Medicare trips people up.

If you are offering benefits for the first time, ask the broker to explain what builds the price before they show you a single quote. I lay that out in what it costs a small business to offer health insurance.

Extra questions if you are buying for yourself or turning 65

If you are self-employed or between jobs, ask whether the broker can enroll you in a Marketplace plan with any savings you qualify for. HealthCare.gov notes that to get savings such as the premium tax credit through an agent or broker, they must enroll you through the Marketplace. You can also enroll yourself, and I explain when that works well in buying your own plan on HealthCare.gov.

If you are approaching 65, ask whether the broker works with both Medicare Advantage and Medicare Supplement plans, or only one. Someone who sells only one type cannot give you a fair comparison of the two. I walk through that choice in Medicare Advantage or a Medicare Supplement.

Red flags that should end the conversation

Most brokers are decent people trying to do a good job. A few habits, though, should make you slow down or walk away, whoever the person is.

The short-term point deserves a word. The Texas Department of Insurance warns that short-term and other alternative plans may not cover preexisting or chronic conditions, do not have to follow federal rules, and do not qualify for federal subsidies. They can be a reasonable bridge for a healthy person between jobs. They are not a substitute for major medical coverage, and a broker who blurs that line is not looking out for you.

• Pressure to sign today, before you have seen a written summary of the plan
• No clear answer about which carriers they represent
• A short-term or limited plan pitched as if it were full major medical coverage
• Reluctance to check your doctors or prescriptions before you enroll
• A request to leave health conditions off an application
• No way to reach them after the sale

Check the license yourself in two minutes

TDI says plainly that it is against the law to sell insurance without a license and that an unlicensed company might not pay your claim. You can verify an agent or company through TDI's website or its Help Line at 800-252-3439, and TDI can also tell you how many complaints have been filed and whether it has taken disciplinary action. Doing this before you share personal or health information costs you nothing.

TDI's guide also warns that leaving information off an application on purpose can lead to canceled coverage or denied claims. A broker who suggests otherwise is putting your coverage at risk.

What to expect if you call me

I start by asking what you have now, what you need, and what you would change if you could. For a business, I ask for a census and your current plan. For an individual or someone turning 65, I ask about your doctors, prescriptions and budget. Then I compare options across carriers, show you the differences in plain language, and tell you what I would choose in your position and why.

You decide. If the plan you have is the right one, I will say so. If you move, I handle the paperwork and stay your contact afterward, whether you are a company in the Dallas area or a family in Plano. There is no cost to you for any of it.

Questions people ask me