On July 24, Sen. Ron Wyden (D-Ore.) and five senate colleagues introduced the Insurance Fraud Accountability Act that would subject health insurance agents and brokers to criminal charges and civil penalties if they fraudulently enroll consumers in Affordable Care Act (ACA) plans or switch consumers from one plan to another.
“Predatory health insurance brokers are stealing money out of families’ pockets by leaving them with uncovered medical expenses, unexpected tax liabilities and more by fraudulently changing or enrolling Americans in health insurance plans in the federal marketplace,” Wyden said in a July 24 statement from the Senate Finance Committee.
As the committee chairman, Wyden had promised the bill in May, when he called on federal regulators to do more to combat unauthorized ACA enrollment schemes, Julie Appleby reported for KFF Health News. In addition to criminal charges, agents and brokers who enroll or switch consumers out of insurance plans without their consent could face fines of as much as $200,000, she added.
Journalists covering ACA open enrollment this fall will want to watch what effect, if any, the new rules have on agents, brokers and consumers in the 32 states that use the Federally-facilitated Marketplace (FFM) at healthcare.gov, Appleby noted. The District of Columbia and the remaining 18 states run their own marketplaces, as KFF shows in this report. In all states, open enrollment for ACA plans begins Nov. 1.
More about the new legislation
When consumers don’t know they’re enrolled in a new ACA plan or are switched to another plan without their consent, they can lose access to their preferred physicians or in-network doctors, be required to pay more out of pocket or face unexpected tax bills, wrote Appleby, who has covered this story since April. The ACA is also known as Obamacare.
On July 19, the federal Centers for Medicare and Medicaid Services (CMS) blocked insurance agents and brokers from switching consumers’ ACA plans without their consent or from making any changes to a consumer’s enrollment unless the agent or broker had previously enrolled that consumer, Appleby reported. Since April 2, Appleby has written at least 12 articles about consumers enrolled in ACA plans or switched to another plan without their knowledge.
200,000 consumer complaints
The senate bill and CMS’ enforcement action are significant because since January, consumers filed more than 200,000 complaints with CMS about either being switched from one plan to another without their consent or about being enrolled in ACA plans they didn’t need, Appleby wrote.
Also, fixing the problems that rogue agents and brokers cause could make it more difficult for low-income consumers to enroll, Appleby reported. That concern is important because a record number of consumers (21.3 million) enrolled in ACA plans last fall, including more than 5 million who were new to the ACA and 16 million who renewed their coverage, as we reported in January and in February.
“That is the knife edge the administration has to walk, protecting consumers from fraudulent behavior while at the same time making sure there aren’t too many barriers,” Sabrina Corlette told Appleby. Corlette is a founder, and co-director of the Center on Health Insurance Reforms (CHIR) at Georgetown University.
New enrollment steps required
In a July 19 statement, CMS said it was committed to protecting consumers from bad actors by ensuring the marketplaces operate with integrity, Appleby added.
“An agent or broker who is not already associated with a consumer’s enrollment must now take additional steps to update a consumer’s Marketplace enrollment, even with their consent,” CMS announced. Agents and brokers working with new consumers or have not previously been associated with those consumers can make changes to the consumer’s enrollment only in one of two ways, CMS said. One is by conducting a three-way call with the consumer and someone from the ACA’s Marketplace call center, and the other is by having the consumer make the change themselves, CMS said.
Agents and brokers suspended
CMS said it suspended 200 agents or brokers based on having reasonable suspicions of fraud or abusive conduct related to unauthorized enrollments or unauthorized plan switching. Those suspensions occurred from June 21 through July 10, and will continue as needed, the agency added.
Of the 200,000 complaints, CMS received 73,884 complaints from consumers who alleged that their health insurance plan was changed without their consent and that almost 98% of the complaints had been resolved. CMS also got 134,368 complaints from consumers who said they had been enrolled into ACA plans without their consent and that almost 97% were resolved. Officials were working to resolve the remaining complaints, the agency added.
What consumers should know
At healthcare.gov, federal officials explain the differences between health insurance agents and brokers. Agents may work for a single health insurance company, and brokers may represent several insurers. All agents and brokers must be licensed in their states and have signed agreements to sell ACA marketplace plans. In many states, brokers are required to act in a consumer’s best interest.
With either an agent or a broker, consumers should not pay any more than the cost of the health insurance plan itself. In addition, agents and brokers often get paid in commission from health insurers.
For any consumers who enroll with an agent or broker and who qualifies for a premium tax credit and other savings based on family size and annual income the agent or broker must enroll the consumer through the ACA marketplace in the consumer’s state, according to healthcare.gov.
