Lawmakers and state officials are turning up the heat on federal regulators to stop unscrupulous, commission-hungry insurance agents from enrolling thousands of people in Affordable Care Act plans, or switching their coverage, without their knowledge.
Customers often don’t discover the changes until they’re denied medical coverage or get stuck with a bill for ACA tax credits they have to repay.
Senate Finance Committee Chair Ron Wyden (D-Ore.) said he’ll propose legislation to allow the Centers for Medicare and Medicaid Services to hold fraudulent brokers “criminally responsible” for their actions. The agency, which oversees the ACA exchanges, can fine individuals up to $250,000 for submitting false information in an application for a health plan, but it hasn’t done so, Wyden said.
“I am disappointed these penalties have not yet been used to hold bad actors accountable,” Wyden wrote last week in a sharply worded letter to CMS Chief Chiquita Brooks-LaSure.
Jimmy Patronis, who oversees agencies including insurance regulators as Florida’s chief financial officer, called on Congress to push CMS to require two-factor authentication on healthcare.gov and related platforms that agents use to sign people up for coverage. According to Patronis, the state has opened more than 900 investigations into problem enrollments.
“It’s far easier to prevent fraud from occurring in the first place than it is to ask state regulators to chase down these bad actors after the fact,” Patronis wrote.
The problem appears concentrated among the 32 states using the federal marketplace — healthcare.gov — because, brokers say, it’s too easy for rogue agents to access policyholder information. All they need is a name, date of birth and state.
States that run their own insurance markets generally have additional security requirements.
CMS tallied 90,000 complaints about unauthorized sign-ups or plan switching in just the first quarter of 2024, out of more than 16 million enrollments.
Jeff Wu, acting director of the Center for Consumer Information and Insurance Oversight at CMS, has said his agency is preparing regulatory and technological fixes, investigating brokers and working to restore consumers to chosen plans.
But even with Wyden’s legislation on the way, Congress looks unlikely to act. Lawmakers are in the middle of an election year in which President Biden is trying to win votes for bolstering enrollment in ACA plans while knocking his opponent, former president Donald Trump, for his unsuccessful attempt to repeal the law.
Sabrina Corlette, who follows the ACA market as co-director of the Center on Health Insurance Reforms at Georgetown University, said the feds can do more, including coordinating better with state investigations.
But states like Florida should also regulate the marketplaces, she said.
“If there’s a lot of bad brokers in Florida, then Florida needs to look inward and maybe do a better job of policing brokers,” she said.
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