CEO Bobby Huffaker, left, and COO Andrew Hetzler stand in American Exchange in the Hamilton County Business Development Center Wednesday, October 7, 2015.Julia Sannes, a Soddy-Daisy, Tennessee, retiree, had grown weary of trying to work through the Healthcare.gov hotline to correct problems with her health insurance policy, which was purchased through marketplace exchanges established by the landmark Affordable Care Act. Somehow, she says, she had been assigned two health-care policies, and no one in the customer service pipeline seemed to be able to help her correct that.
“I would be on the phone for two or three hours at a time, and they didn’t know how to fix it,” Sannes says. “If it weren’t for American Exchange, I would still be on hold.”
Sannes credits American Exchange, a Chattanooga-based start-up company created to help consumers connect with the health-care exchanges, with correcting her problems. Before, she says, she had a more expensive health policy ($434 a month) with a small doctor network and a $5,600 deductible. Now, she says, after working with American Exchange agents, her cost is $143 a month and she has a “silver” level plan from the marketplace that she can afford to use. She credits the workers at American Exchange for helping her troubleshoot her self-service approach to the marketplace and for aligning her needs with the best-available plan.
That’s music to the ears of American Exchange Co-founder Bobby Huffaker and Chief Operating Officer Andrew Hetlzer, two under-30 health-care executives who are trying to position their company to be a regional player in the growing individual health-care policy market. An estimated 60 percent of the participants in the ACA’s marketplace for individual plans are using Healthcare.gov as their portal to health insurance.
The 17 million Americans now signed up for individual health-care policies through the exchanges comprise a vast potential market of people such as Sannes who need help navigating their options. While the well-documented glitchy roll-out of the Healthcare.gov web site in late 2013 is now a distant memory, making smart choices about individual health-care policies is still a reach for most Americans.
After a big push to help consumers sign up for ACA marketplace health-care plans in late 2013 and 2014, the leaders of American Exchange have downsized and retooled their company to create a more flexible workforce to accommodate the ebb and flow of the ACA’s yearly enrollment period, which runs from November 1 through the end of January. The company has enrolled 7,000 people in marketplace plans since late 2013, and leaders hope to double that number each year.
“It’s very seasonal,” says Huffaker, 27, co-founder of the company and a graduate of the University of Mississippi. “We have to scale up and scale down.”
When the marketplace open enrollment period ends, the company’s agents focus on everything from Medicare supplement plans to helping customers with insurance claims problems.
Business this year has been so strong that American Exchange managers have suspended their advertising. About 80 percent of their business involves customers in Tennessee and Georgia, they say. Although they can help consumers from anywhere, the company’s broker/agents are especially well-versed in the Tennessee and Georgia marketplace policy networks.
While government helpers, called navigators, can assist marketplace customers with signing-up for health-care plans, they are limited in what they can do to explain and steer people to different policies. “Navigators aren’t allowed to discuss plans,” says company COO Heltzler, 28, a Chattanooga native who attended Appalachian State University. “We take more of a needs-based approach, looking at a customer’s medical needs. That’s how we add value.”
American Exchange’s services are free to consumers. The company is paid by insurance companies who compensate the company for each sign-up. Because the compensation is fairly level from company to company, American Exchange is able to steer clients to the best plans without sacrificing profitability, its leaders say.
American Exchange, with offices located in the Chattanooga Business Development Center at 100 Cherokee Boulevard, was established with help from the Lamp Post Group, a local venture incubator. Most of the company’s business is done by licensed brokers on the telephone at the company’s offices. Even the bosses man the phones during the enrollment period to help customers.
Company leaders say that through trial and error they have learned to streamline a process that used to take 90 minutes or more, to about a third of that time. Instead of trying to work through the whole process as one sitting, American Exchange agents often give customers options to study and reconnect once they have had time to consider several plans.
The company employs a half dozen or so workers during non-peak periods of the year, and doubles that during enrollment season. So far, Hetzler and Huffaker say they have been able to attract a steady stream of applicants for their seasonal positions by using hiring websites and holding out the promise of full-time employment to some of the workers. For example, they recently received 200 applications for six open positions.
Both Huffaker and Hetzler have college degrees in insurance and risk management, and both had worked in the insurance business prior to collaborating on American Exchange. Huffaker previously worked for RSS Huffaker Benefits and Hetzler was employed by J.Smith Lanier and Co.
While both men acknowledge that their business plan is tied closely to the ACA – which is under constant assault in the courts and halls of Congress – they believe the government-subsidized individual health-care market is here to stay.
“There have been a lot of shots at the law,” says Huffaker, “but I don’t see it going away.” He noted that with subsidies available to middle-class households – a family of five with up to $100,000 in yearly income can get assistance – a full repeal will be a tough sale for lawmakers.
Too, the entrepreneurs hope to build a loyal base of individual health-care plan customers who will need the assistance of brokers going forward. With policy rates in flux, the era of buy-it-and-forget-it health care is over, they say.
“It’s unlike any product on the market,” says Huffaker. “Unlike your cable or electric bill, individual health-care needs to be re-evaluated every year.”
Customer service is also an area in which the company hopes to excel. With reports of consumers waiting two to five hours to talk to a Healthcare.gov navigator during peak enrollment periods, American Exchange leaders say they are sure they can do much better than that, while offering year-round advice and support to their customers.