Biden team’s tightrope: Reining in rogue Obamacare agents
President Joe Biden counts among his accomplishments the record-high number of people, more than 21 million, who enrolled in Obamacare plans this year. Behind the scenes, however, federal regulators are contending with a problem that affects people’s coverage: rogue brokers who have signed people up for Affordable Care Act plans, or switched them into new ones, without their permission.
Fighting the problem presents tension for the administration: how to thwart the bad actors without affecting ACA sign-ups.
Complaints about these unauthorized changes — which can cause affected policyholders to lose access to medical care, pay higher deductibles, or even incur surprise tax bills — rose sharply in recent months, according to brokers who contacted KFF Health News and federal workers who asked not to be identified.
Ronnell Nolan, president and CEO of the trade association Health Agents for America, said her group has suggested to the Centers for Medicare & Medicaid Services that it add two-factor authentication to healthcare.gov or send text alerts to consumers if an agent tries to access their accounts. But the agency told her it doesn’t always have up-todate contact information.
“We’ve given them a whole host of ideas,” she said. “They say, ‘Be careful what you wish for.’ But we don’t mind going an extra step if you can stop this fraud and abuse, because clients are being hurt.”
Some consumers are pursued when they respond to misleading social media marketing ads promising government subsidies, but most have no idea how they fell victim to plan-switching. Problems seem concentrated in the 32 states using the federal exchange.
Federal regulators have declined to say how many complaints about unauthorized sign-ups or plan switches they’ve received, or how many insurance agents they’ve sanctioned as a result. But the problem is big enough that CMS says it’s working on technological and regulatory
solutions. Affected consumers and agents have filed a civil lawsuit in federal district court in Florida against privatesector firms allegedly involved in unauthorized switching schemes.
Biden has pushed hard to make permanent the enhanced subsidies first put in place during the COVID pandemic that, along with other steps including increased federal funding for outreach, helped fuel the strong enrollment growth. Biden contrasts his support for
the ACA with the stance of former President Donald Trump, who supported attempts to repeal most of the law and presided over funding cuts and declining enrollment.
Most proposed solutions to the rogue-agent problem involve making it more difficult for agents to access policyholder information or requiring wider use of identity questions tied to enrollees’ credit history. The latter could be stumbling blocks for low-income people or those with limited financial records, said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University.
“That is the knife edge the administration has to walk,” said Corlette, “protecting consumers from fraudulent behavior while at the same time making sure there aren’t too many barriers.”
Jeff Wu, acting director of the Center for Consumer Information & Insurance Oversight, said in a statement that the agency is evaluating options on such factors as how effective they would be, their impact on consumers’ ability to enroll, and how fast they could be implemented.
The agency is also working closely, he wrote, with insurance companies, state insurance departments, and law enforcement “so that agents violating CMS rules or committing fraud face consequences.” And it is reaching out to states that run their own ACA markets for ideas.
That’s because Washington, D.C., and the 18 states that run their own ACA marketplaces have reported far fewer complaints about unauthorized enrollment and planswitching. Most include layers of security in addition to those the federal marketplace has in place before agents can access policyholder information.
California, for example, allows consumers to designate an agent and to
“log in and add or remove an agent at will,” said Robert Kingston, interim director of outreach and sales for Covered California, the state’s ACA marketplace. 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.
By contrast, agents can more easily access policyholder information when using private-sector websites that link them to the federal ACA market — all they need is a person’s name, date of birth, and state of residence — to enroll them or switch their coverage.
CMS has approved dozens of such “enhanced direct enrollment” websites run by private companies, which are designed to make it easier and faster for agents certified to offer insurance through healthcare.gov.