Jones on License Fee Hike, Affordable Care Act

By | March 7, 2013

California Insurance Commissioner Dave Jones treaded lightly when discussing a fee increase on insurance licenses to be announced officially next week, but didn’t pull any punches when delivering his thoughts on navigators and the Affordable Care Act.

Jones spoke to a group of agents and brokers on Thursday in downtown Los Angeles about licensing, and the impacts of the Affordable Care Act on California. He was the headline speaker at the luncheon during I-Day 2013 at the Westin Bonaventure Hotel & Suites, an annual event put on by the Independent Insurance Agents & Brokers of California.

Jones, who noted there are roughly 325,000 licensed agents and brokers in California, said his office handles 70,000 applications each year.

The California Department of Insurance recently streamlined the licensing process. This process requires people to pass the qualifying license examination before they submit the required application, meaning they pay the license application fee only if they pass the examination, which for most licenses is $128. Additionally the new process “streamlines the handling of license applications,” which eliminates applications that were in a pending status while the applicant underwent the examination.

However, to deal with rising costs, next week CDI plans to introduce a fee hike by 10 percent for licensing.

“I don’t take this lightly,” Jones said. “It was a tough decision. We made it after a lot of analysis.”

The license fees are $128 for every two years, so the hike, Jones said, amounts to roughly $12, or $6 per year.

“Just to put it in perspective it’s a venti caramel macchiato with an extra shot,” he said, holding up a coffee beverage to illustrate his point.

In another matter related to licensing Jones talked about his support of an initiative that will enable to agents licensed in California to get licensed in other states, part of an ongoing effort the Independent Insurance Agents & Brokers of America Inc.

Jones noted that California insurance commissioners have traditionally not been interested in allowing that, but he said he likes the idea and plans to support a bill expected to be reintroduced that will enable.

“We live in a world where business is transacted in a global economy,” Jones said.

Jones also tackled the Affordable Care Act, noting that Assembly Bill 922, which Jones opposed, takes money paid by agents to be licensed and could possibly divert that money to their competitors.

AB 922, passed and signed into law in 2012, essentially beefs up the Office of Patient Advocate, enabling the office to better provide outreach and education about healthcare coverage to consumers. The office is funded by the Managed Care Fund and the Insurance Fund, into which agents pay their license fees and which funds CDI.

Though this system money is taken out to help fund these “navigators,” who will eventually be competition for agents and brokers.

“I don’t think this is a good thing,” Jones said.

In fact, navigators were a bit of a sore subject with Jones, who noted that at present it looks like they won’t be going through any rigorous background checks, such as fingerprinting.

Jones noted that the navigators are going to get access to “10s of-millions of dollars” to help people find healthcare, and they will have access to people’s private information and sensitive data, so “at a minimum it seems to me you need to be able to make sure you don’t just have a pulse, a phone and a desk.”

Covered California, the state-based health exchange set to launch within a year, will run this system, and they are considering only superficial background checks, said Jones, who sent a letter outlining his concerns to the group. Jones said he believes their plan for background checks is not a thorough one, calling it a “modest proposal.”

“I think it’s the only way you can prevent convicted criminals from becoming navigators and prevent navigators from becoming convicted criminals,” Jones said.

The group is expected to make a decision on background checks on March 21.

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