KFF health news illustration
KFF health news illustration
President Joe Biden takes credit for enrolling a record number of people in Obamacare plans this year, more than 21 million people. But behind the scenes, federal regulators are battling an issue that affects people's coverage: rogue brokers who enroll people in Affordable Care Act plans without their permission or switch them to new plans.
Now, the administration is trying to find ways to stop bad actors without affecting ACA enrollment.
Unauthorized changes can leave affected policyholders unable to receive medical care, pay high deductibles, or even face unexpected tax bills. Complaints about them have skyrocketed in recent months, according to brokers who contacted KFF Health News and federal officials who spoke on condition of anonymity.
Federal regulators have not said how many complaints they have received or how many insurance agents have been sanctioned as a result. But the problem is large enough that the Centers for Medicare and Medicaid Services says it is working on technical and regulatory solutions. Affected consumers and agents have filed a civil lawsuit in U.S. District Court for the District of Florida against a private company for allegedly engaging in a fraudulent switching scheme.
Ronnell Nolan, president and CEO of the industry group Health Agents for America, said the group is asking CMS to add two-factor authentication to healthcare.gov or allow agents to log into their accounts. It said it offered to send text alerts to consumers if they attempted to access it. But her agency told her she didn't always have up-to-date contact information.
“We gave them a lot of ideas,” she said. “They say, 'Be careful what you wish for.' But we don't mind going the extra mile if you can help stop this fraud and abuse because our clients are being harmed.” I won’t.”
Some consumers are pursued in response to misleading social media marketing ads promising government subsidies, but most do not know how they became victims of plan switching. The problem appears to be concentrated in the 32 states that use the federal exchange.
Balancing consumer protection and access restrictions
Biden is pushing hard to make permanent the enhanced subsidies first introduced during the pandemic, which, along with other measures such as increasing federal funding for relief efforts, will help boost enrollment by significantly increasing enrollment. contributed to the promotion of Biden contrasted his support for the ACA with the positions of former President Donald Trump, who supported attempts to repeal large portions of the law and presided over funding cuts and enrollment declines during his presidency. There is.
Most of the proposed solutions to the fraudulent agent problem either make it more difficult for agents to access policyholder information or require more extensive identification questions tied to the policyholder's credit history. Contains requests for proper use. Sabrina Corlett, co-director of Georgetown University's Center on Health Care Reform, said the latter could be an obstacle for people with low incomes or limited financial records.
“It's a knife edge that the administration has to walk to protect consumers from fraud while also making sure there aren't too many barriers in place,” Corlett said.
Jeff Wu, acting director of the Consumer Information and Insurance Oversight Center, said in a statement that the agency will evaluate options, considering factors such as how effective they are, their impact on consumers' ability to enroll, and how quickly they can enroll. He said that Implemented.
The agency also works closely with insurance companies, state insurance departments, and law enforcement “to ensure that agents who violate CMS rules or commit fraud are brought to justice,” he wrote. And he's reaching out to states that run their own ACA markets for ideas.
That's because Washington, D.C., and the 18 states that operate their own ACA marketplaces report far fewer complaints about fraudulent enrollments and plan switching. Most have an additional layer of security built in, and some even use two-factor authentication, before the agent can access policyholder information than the one the federal marketplace has in place.
California, for example, allows consumers to designate agents and “log in to add or remove agents at will,” said Interim Director of Outreach and Sales at Covered California, the state's ACA marketplace. said Robert Kingston. The state can also send consumers a one-time passcode to share with an agent of their choice. Consumers in Colorado and Pennsylvania can similarly designate specific agents to access their accounts.
In contrast, insurance agents can easily access policyholder information using private websites that link to the federal ACA marketplace. All that is required from the policyholder is the individual's name, date of birth, and place of residence. You can enroll in insurance or switch insurance.
CMS has approved dozens of such “enhanced direct registration” websites run by private companies. These websites are designed to make it easier and faster for authorized agents to offer insurance through healthcare.gov.
The rules went into effect in June last year, requiring agents to obtain written or recorded consent from customers before enrolling them or changing their coverage, but brokers are not required to provide documentation. It is said that there are almost no such cases. If CMS makes changes to healthcare.gov, such as adding passcodes like California does, it must require all alternate enrollment partners to do the same.
Looking for a “targeted” solution
Its largest enrollment partner is San Francisco-based Health Sherpa, which facilitated 52% of all active enrollments in the U.S. this year, according to CEO George Kalogeropoulos.
He said the company has a 10-person fraud investigation team and has “significantly increased concerns about fraudulent switching.” They report problems to state insurance departments, insurers and federal regulators and “refer consumers to advocates from our team to ensure their plans are fixed.”
Solutions must be “targeted,” he said. “The problem with some of the proposed solutions is that they negatively impact the ability of all consumers to register.”
Most people who sign up for an ACA plan are helped by an agent or a platform like HealthSherpa, rather than going through the process themselves or seeking help from a nonprofit organization. Brokers do not charge fees to consumers. In exchange, we receive a fee from insurance companies participating in state and federal marketplaces for each person who enrolls in a plan.
California officials say the extra layer of verification has not had a noticeable impact on enrollment, but the state's recent enrollment growth has been slower than in states served by healthcare.gov. That's what it means.
Still, Covered California's Kingston noted that the number of uninsured people in the state is decreasing. Data compiled by KFF shows that 12.5% of Californians were uninsured in 2014, when most of the ACA took effect, but that number dropped to 6.5% in 2022. In the same year, the rate of uninsured people nationwide was 8%.
Corlett said insurance companies have a role to play, as do states and CMS.
“Is there an algorithm that can say, 'This is a broker that's behaving abnormally?'” That way, insurers can withhold commissions “until we understand the situation,” he said.
Kelly Schultz, vice president of commercial policy at AHIP, a trade group for large insurance companies, said sharing more information from government markets about which policies are being switched could help insurers identify patterns. He said there is.
Schultz said CMS may place limits on plan switching because there is usually no legitimate need to switch multiple times a month.
KFF Health News is a national newsroom that produces in-depth journalism on health issues and is one of our core operating programs. KFF — An independent source for health policy research, polling, and journalism.
