Stronger actions are needed immediately to thwart insurance brokers who fraudulently enroll or switch people in Affordable Care Act coverage, Sen. Ron Wyden, chairman of the powerful Senate Finance Committee, said Monday.
鈥淲e want the Centers for Medicare & Medicaid Services to hold these brokers criminally responsible for ripping people off this way,鈥 he told 蘑菇影院 Health News.
In a sharply worded letter sent to CMS Administrator Chiquita Brooks-LaSure, the Oregon Democrat expressed 鈥渙utrage鈥 over the practice, which nets unscrupulous agents commission payments while leaving consumers with a potential host of problems, from losing access to their regular doctors or treatments to higher deductibles and even owing taxes.
Noting that tens of thousands of Americans have been victimized, Wyden called on regulators to step up enforcement and be more proactive in notifying potentially affected consumers. He vowed to introduce legislation that would make participating in such schemes subject to criminal penalties.
鈥淐MS must do more and you must do it now,鈥 he wrote in his letter.
Complaints about such unauthorized enrollment schemes have grown in recent months. 蘑菇影院 Health News has reported that unscrupulous brokers or agents can easily access policyholder information to change their coverage through private commercial platforms integrated with the federal Obamacare marketplace, healthcare.gov, which serves 32 states.
The challenge for federal regulators is to thwart the activity without reducing enrollment 鈥 a top priority for President Joe Biden鈥檚 administration.
CMS, which oversees the federal website, said it鈥檚 working on regulatory and technological fixes and can suspend or terminate problem agents鈥 access to healthcare.gov.
The agency will respond directly to Wyden, said Jeff Wu, acting director of CMS鈥 Center for Consumer Information & Insurance Oversight, in a written statement. He further noted that the agency is 鈥渃onsistently evaluating opportunities to identify and resolve issues sooner, including through outreach, technical assistance, and compliance actions.鈥
Ronnell Nolan, president and CEO of , whose group has been outspoken about the need for regulators to do more, welcomed Wyden鈥檚 involvement and the potential for criminal penalties for perpetrators.
鈥淚t鈥檚 a crime when a person鈥檚 insurance is taken from them when they鈥檙e in the middle of cancer treatment or on a transplant list and they鈥檙e put in a predicament where they might lose their life because of the fraudulent activity,鈥 she said.
After initially declining to quantify the problem, CMS saying it had received more than 90,000 complaints in the first quarter of 2024 about unauthorized enrollments and plan switches. While the number of complaints represents a small percentage of the more than 16 million enrollments processed through healthcare.gov for this year鈥檚 coverage, it may understate the breadth of the problem, as complaints likely don鈥檛 reflect the magnitude of cases.
Although Wyden lauded CMS鈥 efforts to fix problems already encountered by consumers, he said in his letter that the agency needs to be more proactive about preventing them.
He urged regulators to contact potentially affected consumers instead of waiting to investigate only after a policyholder files a complaint, which sometimes doesn鈥檛 occur until weeks or months after a plan is switched.
It can be difficult for victims to recognize the changes. Rogue agents don鈥檛 obtain their consent, and many are signed up for plans that have no monthly premiums, so they don鈥檛 get a bill. Other consumers unknowingly enroll when they respond to misleading marketing promising gift cards, 鈥済overnment subsidies,鈥 or other financial help.
Rather than wait for a consumer to complain, regulators could reach out directly when they see a policy submitted or changed by a broker or agency that has been found to be fraudulently enrolling others, Wyden wrote.
Wyden also said CMS should use its authority to impose civil penalties, up to $250,000, against 鈥渂rokers who submit fraudulent enrollments.鈥
鈥淚 am disappointed these penalties have not yet been used to hold bad actors accountable,鈥 he wrote.
Finally, he wants the agency to review private-sector platforms used by agents and brokers to enroll consumers in ACA plans. Those private companies are not used by 18 states and the District of Columbia, which run their own ACA marketplaces. The state-run marketplaces impose additional layers of identity-proofing and other security measures and have reported far fewer problems with unauthorized enrollment.
Dozens of private 鈥渆nhanced direct enrollment鈥 to integrate with healthcare.gov. Their involvement was expanded during the Trump administration, which also sharply reduced funding for nonprofits to help with outreach and enrollment.
The platforms were designed to be simpler to use than healthcare.gov. But they have drawn criticism from agents, who say the private websites make it too easy for unscrupulous brokers or others to access policyholder information and make changes. Currently, more than half of federal marketplace enrollments are assisted by agents or brokers, and most act legitimately, regulators and others say.
