The Biden administration on Friday enacted tough restrictions aimed at preventing fraudulent insurance brokers from changing Affordable Care Act plans without their consent.
The announcement came in response to growing consumer complaints. The Centers for Medicare & Medicaid Services said Friday that, in the first six months of the year, more than 200,000 people reported to the agency that they either enrolled in Obamacare plans or switched from one plan to another without their permission.
KFF Health News began reporting on Affordable Care Act enrollment programs this spring.
CMS said insurance agents will be barred from making changes to any Obamacare enrollments made through the federal marketplace, healthcare.gov, unless the agent is already “affiliated” with the consumer’s policy.
In addition, agents who cannot prove the association — which is not specified in the agency directive — will have to take additional steps to make changes even if they have the consumer’s consent.
The changes take effect immediately, an unusually quick move by the agency that may reflect the urgency of the problem. Republicans have argued that enhanced subsidies supported by the Biden administration provide incentives for brokers or consumers to fraudulently report their incomes to qualify for ACA tax credits, while some Democrats have also criticized CMS, saying the agency should take a tougher stance on rogue brokers who switch people without their consent to earn commissions.
Consumers, meanwhile, may face higher costs for medical services or unexpected tax bills if they enroll in subsidized plans for which they don’t qualify.
To demonstrate that they have consumer consent for enrollment changes, CMS said, unaffiliated agents must make three-way calls to the healthcare.gov call center or have their customers make changes themselves, either through healthcare.gov or through one of the registrations in the private sector websites are allowed to link to it.
“CMS expects these updates will help block unauthorized changes by agents and brokers,” the agency said in a statement posted on its website Friday afternoon.
Ellen Montz, deputy administrator at CMS and director of the Center for Consumer Information and Insurance Oversight, said in a written statement to KFF Health News that “CMS will do everything it can to protect consumers from bad actors and help consumers who have experienced a change they didn’t approve.” He added that the “consumer experience” won’t change for people who continue to work with agents already connected to their policies.
The rules have drawn concern as well as some cautious optimism from agents and their trade associations, who have been calling on CMS to act for months.
“On paper, it protects consumers, so that’s a good thing,” said Joshua Brooker, founder of PA Health Advocates in Pennsylvania, who has followed the issue closely. But he and others said the directive raises many questions about how it will work in practice, especially during the busy year-end open enrollment period.
The requirements will weigh on consumers, predicted Ronnell Nolan, president of the agent trade group Health Agents for America.
“They will be responsible for calling the market’s call center, which is a nightmare in itself, to change their dealer,” Nolan said. “Why is it their responsibility?”
The directive only applies to existing coverage, not brand new ACA enrollment.
Complaints about unauthorized enrollment or plan switching are not new, but they accelerated during the last open enrollment period for the ACA. President Joe Biden has boasted record enrollment for ACA plans for 2024. More than 21 million people signed up nationwide during the most recent open enrollment period.
The agency said Friday it has resolved more than 97 percent of complaints reported about registration or switching.
For the first time, the agency also reported on enforcement action, saying that between June 21 and July 10 it had suspended 200 agents or brokers “for reasonable suspicion of fraud or abusive conduct related to unauthorized enrollments or unauthorized plan changes.”
The new rules do not apply to the 18 states and the District of Columbia, which have their own Obamacare insurance markets. Many of them use security procedures that healthcare.gov does not, including two-factor authentication.
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