Question: Will the health reform eliminate health insurance brokers?

Answer: Brokers, in all modern industries, are vulnerable to two developments that risk their livelihoods. First, that the goods or services they sell may be standardized, and second that technology will aggregate information and do away with middlemen.

In these respects, the health reform law poses a clear threat to insurance agents. Specifically, the health insurance exchanges slated to launch in 2014 — which will standardize insurance coverage and ease individual purchases — could further marginalize brokers’ role.

But the exchanges also might provide a windfall to the industry. Millions of uninsured Americans will be pushed to shop the exchanges to obtain coverage and are expected to need assistance. Meanwhile, brokers will be able to apply for Navigator grants under ACA if they can prove that they are helping individuals and small business owners to negotiate their way through the exchanges.

For example, California projects that as many as four million state residents may shop for insurance coverage through the new Health Benefit Exchange. One of the first tasks facing the Exchange’s board is to design the Navigator program.

Can brokers wait until 2014? Many agents say that they are struggling now. Insurance commission schedules that took effect this year sliced broker fees by as much as 50%. A recent National Association of Health Underwriters survey found that 21% of brokers have been forced to cut jobs, and more than 70% have seen their incomes decline because of the reform law.