🔒As health insurers slash commissions and trim plan options, CT brokers feel the squeeze

Jason Gutcheon has had it. The veteran insurance professional and partner at West Hartford-based Professional Business Insurers — which sells healthcare and other types of coverage to individuals and businesses — said the ever-changing health insurance market in Connecticut “has gone absolutely haywire.” He’s not just talking about the huge premium increases consumers and small businesses will face next year — state insurance regulators in September approved an average 16.8% rate increase for state-regulated individual health plans and an 11% increase for small-group policies in 2026. Gutcheon is also talking about how insurance brokers — who represent consumers, unlike agents who serve carriers — are finding it increasingly difficult to do business. “The broker community is getting squeezed, which ultimately is disruptive and not in the best interest of the member insured,” he said recently during an interview with Hartford Business Journal. So what exactly does he mean by “squeezed”? Gutcheon points to three major pressures. The first is the continuing exodus of insurance companies from Connecticut’s fully insured small-group market. Since 2022, Aetna, Cigna/Oscar Health, ConnectiCare and nonprofit Harvard Pilgrim HealthCare have all left the market. ConnectiCare — acquired by Molina Healthcare in February — exited this past June. That’s left just two companies offering fully insured small-group plans in Connecticut: Anthem Blue Cross and Blue Shield and Oxford Health Plans, owned by UnitedHealthcare. Gutcheon said the shrinking field means employers face higher costs and fewer benefit options, while brokers’ commissions have decreased. His second concern is the rise of the level-funded market, which he says is “completely destroying” the fully insured small-group segment. Level-funded plans are a type of self-insured health coverage in which employers pay employees’ medical claims directly, rather than through premiums to an insurer. Because such plans tend to attract companies with the healthiest employees, Gutcheon said, the remaining fully insured market is left serving a disproportionate share of higher-cost, less healthy employees, who visit doctors and utilize insurance benefits much more frequently. “As a result, fully insured small group rates are increasing 15% to 20% a year,” he said. Finally, insurers are increasingly cutting broker commissions on certain health plans, threatening a key revenue stream for agencies. Some insurers selling Medicare Advantage plans — private insurance alternatives to traditional Medicare — have stopped paying broker commissions altogether, citing rising healthcare costs and slower federal reimbursement growth that have squeezed profits in that market. In September, Molina Healthcare told brokers that beginning Jan. 1, it will stop paying commissions in Connecticut on new sales of its Medicare Advantage Prescription Drug plan, though renewal commissions will continue. The insurer also recently notified brokers of commission reductions on individual health plans, Gutcheon said. Anthem announced on Oct. 30 that it plans to reduce commissions for individual health plans in Connecticut. Nationally, a host of other insurers — Aetna, Cigna, UnitedHealthcare, Humana and Wellcare — have also announced plans to stop paying commissions on various Medicare Advantage and individual plans, according to brokers and published reports. Molina officials did not respond to a request for comment. However, in a notice to brokers about its plan to halt commissions for Medicare Advantage Prescription Drug plans, the company described the move as a strategic decision “designed to ensure stability as we continue integrating our operations and systems in this market.” Gutcheon said the changes are painful for brokers and seniors. His firm’s revenues are entirely commission-based, and Medicare and individual plans account for about 35% of its business, with group plans making up the rest. He doesn’t expect many brokerages to go out of business, but the cuts could force some to sell their client lists or merge with other firms. Seniors, meanwhile, depend on brokers to help navigate an increasingly complex array of plan options. “How is that in the best interest of the member, when you have brokers now basically saying (to seniors), ‘You’re on your own because I’m not getting paid for my time,’” he asked.

A ‘mess’

Jace Rosenbluth, president of MERIT Insurance Services in West Hartford — a field marketing organization that connects brokers with insurance products — said some seniors are choosing non-commissionable products but still want their brokers to service them. Brokers, he said, are balking.

“They are saying, ‘No. If you choose that product, you have to deal with the carrier directly, and the consumer is not happy with that,” said Rosenbluth. The situation, he added, has created a “mess,” and put brokers in an ethical bind — sell a plan that pays a commission, even if it’s not best for the client, or walk away and leave seniors to navigate plans that pay nothing. That “mess” prompted four national broker organizations to send an Oct. 9 letter to Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services. The letter — signed by the Health Agents for America, National Association of Benefits and Insurance Professionals, Independent Insurance Agents & Brokers of America, and National Association of Insurance and Financial Advisors — warned that the Medicare program faces a “convergence of pressures that directly undermine beneficiaries’ stability.” It said post-pandemic spikes in healthcare utilization and unintended regulatory consequences have driven up costs for carriers. In response, insurers have restricted sales in various ways, including by eliminating broker commissions. The letter noted that Medicare Advantage — once a growth market — is now seeing contraction, with insurers exiting certain plans and shrinking their service areas. About 33.4 million people are currently enrolled in Medicare Advantage coverage. Agents and brokers, the groups wrote, play a key role in helping beneficiaries choose and manage their plans, but their ability to do so “is being eroded.” The organizations called for urgent, bipartisan reforms, including halting any commission changes announced after Oct. 1.

‘Disastrous’ market

Rosenbluth — whose father, Alvin Rosenbluth, founded MERIT Insurance Services nearly 70 years ago — has worked at the agency for 42 years and has connected brokers with Medicare-related insurance plans for almost two decades. He said the last 24 months have brought a lot of changes to Connecticut’s health insurance market, and over the past year, things have gone from a little bumpy to “disastrous in the state.” Both he and Gutcheon said Connecticut’s health insurance market needs more competition. Gutcheon said a growing number of state coverage mandates have made it harder for insurers to operate profitably in Connecticut, driving some carriers from the market and raising costs for employers. Lawmakers, Gutcheon added, also need to address the commission-payment issue. “Where our are Congresspeople, what are they doing?” he asked. “This is not good for the senior population, and it’s not good for the brokers who are a big part of the community in the state.” State Rep. Kerry Wood (D-Rocky Hill), who co-chairs the legislature’s Insurance and Real Estate Committee, said fixing Medicare-related problems is a federal issue. However, she recently said she plans to continue pushing legislation to allow association health plans, which would let small businesses and nonprofits join together to purchase more affordable insurance. The proposal, which has failed to gain traction in the past, will likely resurface when the General Assembly reconvenes in February.