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As Obamacare prices rise, and choices shrink, agents get squeezed

"They're losing tens of millions"

It's bad enough that United Healthcare pulled out of the Pennsylvania exchange that sells the subsidized health insurance parties last year, when rates went up 10%. Or that Aetna -- which less than 10 years ago dominated the local market for individual policies -- stopped writing the policies here earlier this year, when rates went up another 10%.

But "IBC yesterday said they will no longer be paying us for new business," except for its HMO Bronze and Silver Proactive Value (corrected) plans, not available on the state exchange, which Mendelsohn called "the worst plans" available for their cost and coverage ratios.

Agents will still collect fees for old policies that remain in force.  Mendelsohn says he, for one, won't starve: "I'm diversified. I also sell Medicare, life insurance, annuities.

"But as far as the individual health insurance space is concerned, it's we agents who helped build their business. And those fees are how agents make a living." He doubts IBX will easily be able to handle all the new applications it is trying to collect online.

He understands why IBX is doing this: "They're losing tens of millions on these plans."

But he doesn't think IBX will easily manage direct sales, once agents are out of the market. He said the company is advertising for order-takers and will have to train them fast.

UPDATE: IBX response: "Independence Blue Cross is committed to this market, as we have been for 80 years, despite the exit of other insurers," responds Brett Mayfield, VP-new business sales: "We believe brokers play an important role in the purchase process and in helping our members make the best choices for themselves and their families. We will continue to offer commissions for all existing broker consumer business, as well as, commissions for new enrollment in select plans that are not offered through Pennsylvania's Federally Facilitated Marketplace."