Some insurance brokers are enrolling people into Affordable Care Act health plans without their consent, perhaps for that commissions, moving that may put consumers at risk of owing back the subsidies connected with the coverage. The harm might be hundreds or even thousands of dollars.
A consumer's first hint that something is wrong is a huge one: instructions from the IRS or perhaps a delay in their tax refund.
Although the practice doesn't appear widespread, it's prompted the Department of Health and Human Services to find changes with a oversight rules affecting brokers. They'd start in 2023.
HHS wants the changes, based on its proposal, because it “has observed several instances by which agents, brokers, and web-brokers have provided inaccurate consumer household income projections” which “this is problematic in situations when consumers are enrolled without their knowledge or consent.”
The changes are part of a 400-page proposed rule governing the federal health insurance marketplace and some states which use the government platform for his or her own exchanges. The new broker provision aims to discourage fraudulent sign-ups by clarifying that applicants must attest the income projections listed are correct. It also would bar brokers or services who help people sign up for coverage from using “disposable” emails, which disappear after a set length of time, or listing the brokers' phone numbers rather than the consumers'.
That there is a proposal at all “tells me they had a significant number of cases on this” which previous actions have not done enough to curb the issue of people getting fraudulently enrolled, said Tara Straw, director of health insurance and marketplace policy at the Center on Budget and Policy Priorities.
A spokesperson for the Centers for Medicare & Medicaid Services said in an email the agency is not seeing a pervasive problem, but he declined to provide data on how often such cases occur or the way the agents or brokers obtain the private information needed to enroll unsuspecting people.
Nonetheless, experts in law, policy and enrollment say it is a recurrent issue. Many cited examples beginning with a 2022 case in which a real estate agent allegedly registered countless people from New york homeless shelters for plans in which the authorities paid the entire premium, often referred to as “zero-premium plans,” by utilizing questionable estimates of their annual income.
Jodi Ray, who oversees a Florida organization that can help people sign up for coverage, said her employees saw cases last year in which clients seeking assist with enrollment inside a county health plan discovered they were already signed up for a federal ACA plan but was clueless that who had signed them up.
In another example, a partner organization found that an agent was enrolling people with job-based coverage in subsidized ACA plans, said Ray, director of Florida Covering Kids & Families, a course in the University of South Florida. Such double enrollment is not allowed under the law and could leave the employees on the hook for repaying the subsidies.
“That sets consumers up to be harmed,” said Ray, whose office reports these kinds of findings to state regulators.
She emphasized the vast majority of brokers yet others who help people enroll are honest and protect consumer information carefully but asserted the few who do not create distrust one of the public. Groups like hers, often called navigators or assisters, have no incentive to falsify enrollments since they're not paid commissions, she said.
But agents, brokers and web-based services are.
“The profit motive is a very important thing to bear in mind as to why this happens whatsoever,” said Straw, who noted that insurers pay commissions even on zero-premium plans.
The proposed changes be government estimates show that a minimum of 42% of people with the federal health insurance marketplace likely could be eligible for a a zero-premium plan according to their income.
That may be one factor behind the growing worry about consumers enrolled without their consent – with no monthly bill, consumers have few ways of knowing they're in a plan.
“There are a lot more zero-dollar premium plans available,” said Sabrina Corlette, a researcher at Georgetown University's Focus on Health Insurance Reforms. Bad actors “can essentially fake their email or phone number, fake someone's income to state they're entitled to a zero-dollar plan, and also the person would never know.”
Regulators have seen “several instances where consumers go months” without realizing they're enrolled, according to the proposed HHS rule. By that time, their insurers may have been paid hundreds – even thousands – of dollars in subsidies, also known as tax credits, that the policyholder might have to repay if their actual earnings are over the subsidy threshold.
Under the ACA, sliding-scale subsidies are available to help low- and moderate-income people buy coverage. People who underestimate their income for the year may owe back all or a part of those subsidies, although payback amounts are capped for those in lower income ranges.
Consumers possess some recourse. If they are subscribed to coverage without their consent, for example, they are able to appeal to the government exchange to retroactively cancel their coverage. However they have only Two months after discovering the fraudulent enrollment to do this.
“It's complicated to repair on the tailgate end,” Straw said.
The health insurance marketplaces and insurers, which could lose customers due to such practices, “need to become more proactive around the front end” – for instance, asking questions if they notice “a dozen individuals with exactly the same address or the same telephone number,” she said.
Christine Speidel, an affiliate professor at Villanova University law school and also the director of their federal tax clinic, which helps low-income taxpayers with IRS-related concerns, agrees that prevention is better than fixing the issue after the fact.
“When you've got a fraudulent enrollment and it's discovered annually or more later, it is a lose-lose situation: The insurer is screaming, and also the taxpayer is frustrated and worried that they might be on the hook,” said Speidel, who has not seen a current case of this kind but has previously handled some by which people did not know they were enrolled in coverage.
Agents who violate the guidelines set through the federal exchange could be barred from selling coverage through it or face civil monetary penalties, said Kristine Grow, a spokesperson for AHIP, an industry trade group formerly known as America's Health Insurance Plans. States also can revoke agents' licenses.
“Enrolling people in coverage without their consent is fraud, and health insurance providers support protections for consumers against this kind of fraud,” she said.
Consumers seeking help when purchasing insurance should check to make sure the individual selling it is licensed since the issues with fraudulent sign-ups “often are from someone not licensed,” said Marcy Buckner, senior v . p . of presidency affairs at the National Association of Health Underwriters, addressing brokers.
The group supports additional protections for consumers, she added.
HHS is gathering comments around the proposed rule through Jan. 27.
Julie Appleby:
jappleby@kff.org,
@Julie_Appleby
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