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 Ä¢¹½Ó°Ôº 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-to-date 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.

CMS about unauthorized ACA plan switches and enrollments in the first quarter of 2024, according to the agency.

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 private-sector 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 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 plan-switching. Most include layers of security in addition to those the federal marketplace has in place — some use two-factor authentication — 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.

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.

last June requiring agents to get written or recorded consent from clients before enrolling them or changing their coverage, but brokers say they’re rarely asked to produce the documentation. If CMS makes changes to healthcare.gov — such as adding passcodes, as California has — it would need to require all alternative-enrollment partners to do the same.

The largest is San Francisco-based HealthSherpa, which assisted 52% of active enrollments nationally for this year, said CEO George Kalogeropoulos.

The company has a 10-person fraud investigation team, he said, which has seen “a significant spike in concerns about unauthorized switching.” They report problems to state insurance departments, insurance carriers, and federal regulators “and refer consumers to advocates on our team to make sure their plans are corrected.”

Solutions must be “targeted,” he said. “The issue with some of the solutions proposed is it negatively impacts the ability of all consumers to get enrolled.”

Most people who sign up for ACA plans are aided by agents or platforms like HealthSherpa, rather than doing it themselves or seeking help from nonprofit organizations. Brokers don’t charge consumers; instead, they receive commissions from insurers participating in state and federal marketplaces for each person they enroll in a plan.

While California officials say their additional layers of authentication have not noticeably affected enrollment numbers, the state’s recent enrollment growth than in states served by healthcare.gov.

Still, Covered California’s Kingston pointed to a decreased number of uninsured people in the state. In 2014, when much of the ACA was implemented, 12.5% of Californians were uninsured, , according to data compiled by Ä¢¹½Ó°Ôº. That year, the share of people uninsured nationwide was 8%.

Corlette said insurers have a role to play, as do states and CMS.

“Are there algorithms that can say, ‘This is a broker with outlier behavior’?” Insurance companies could then withhold commissions “until they can figure it out,” she said.

Kelley Schultz, vice president of commercial policy at AHIP, the trade association for large insurance companies, said sharing more information from the government marketplace about which policies are being switched could help insurers spot patterns.

CMS could also set limits on plan switches, as there is generally no legitimate need for multiple changes in a given month, Schultz said.

Ä¢¹½Ó°Ôº Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Ä¢¹½Ó°Ôºâ€”an independent source of health policy research, polling, and journalism. Learn more about .

USE OUR CONTENT

This story can be republished for free (details).

According to the lawsuit, filed in U.S. District Court for the Southern District of Florida, two such call centers paid tens of thousands of dollars a day to buy names of people who responded to misleading advertisements touting free government “subsidies” and other rewards. In turn, sales agents used the information to either enroll them in ACA plans or switch their existing policies without their consent.

As a result, the lawsuit alleges, consumers lost access to their doctors or medications and faced financial costs, such as owing money toward medical care or having to repay tax credits that were paid toward the unauthorized coverage.

Some consumers were switched multiple times or had duplicative policies.

“We allege there was a plan that targeted the poorest of Americans into enrolling in health insurance through deceptive ads and unauthorized switching,” to gain compensation for the sign-ups or capture the commissions that would have been paid to legitimate insurance agents, said Jason Doss, one of two lawyers who filed the case following a four-month investigation.

Doss and Jason Kellogg, the other lawyer on the case, which was filed on behalf of several affected policyholders and agents, are seeking class action status.

Ä¢¹½Ó°Ôº Health News has in recent weeks reported on similar concerns raised by consumers and insurance agents.

Named as defendants are TrueCoverage and Enhance Health, which operate insurance call centers in Florida and other states; Speridian Technologies, a New Mexico-based limited liability company that owns and controls TrueCoverage; and Number One Prospecting, doing business as Minerva Marketing, which is also a lead-generating company. The lawsuit also names two people: Brandon Bowsky, founder and CEO of Minerva; and Matthew Herman, CEO of Enhance Health. Attempts to reach the companies for comment were unsuccessful.

According to the lawsuit, the call centers had access to policyholder accounts through “enhanced direct enrollment” platforms, including one called Benefitalign, owned by Speridian.

Such private sector platforms, which by the Centers for Medicare & Medicaid Services, streamline enrollment by integrating with the federal ACA marketplace, called healthcare.gov. The ones included in this case were not open to the public, but only to those call center agencies granted permission by the platforms.

One of the plaintiffs, Texas resident Conswallo Turner, signed up for ACA coverage in December through an agent she knew, and expected it to go into effect on Jan. 1, according to the lawsuit. Not long after, Turner saw an ad on Facebook promising a monthly cash card to help with household expenses.

She called the number on the ad and provided her name, date of birth, and state, the lawsuit says. Armed with that information, sales agents then changed her ACA coverage and the agent listed on it five times in just a few weeks, dropping coverage of her son along with way, all without her consent.

She ended up with a higher-deductible plan along with medical bills for her now-uninsured son, the lawsuit alleges. Her actual agent also lost the commission.

The lawsuit contains similar stories from other plaintiffs.

The routine worked, it alleges, by collecting names of people responding to online and social media ads claiming to offer monthly subsidies to help with rent or groceries. Those calls were recorded, the suit alleges, and the callers’ information obtained by TrueCoverage and Enhance Health.

The companies knew people were calling on the promise “of cash benefits that do not exist,” the lawsuit said. Instead, call center agents were encouraged to be “vague” about the money mentioned in the ads, which was actually the subsidies paid by the government to insurers toward the ACA plans.

The effort targeted people with low enough incomes to qualify for large subsidies that fully offset the monthly cost of their premium, the lawsuit alleges. The push began after March 2022, when a special enrollment period for low-income people became available, opening up a year-round opportunity to enroll in an ACA plan.

The suit asserts that those involved did not meet the privacy and security rules required for participation in the ACA marketplace. The lawsuit also alleges violations of the federal Racketeer Influenced and Corrupt Organizations Act, .

“Health insurance is important for people to have, but it’s also important to be sold properly,” said Doss, who said both consumers and legitimate agents can suffer when it’s not.

“It’s not a victimless crime to get zero-dollar health insurance if you don’t qualify for it and it ends up causing you tax or other problems down the road,” he said. “Unfortunately, there’s so much fraud that legitimate agents who are really trying to help people are also being pushed out.”

Ä¢¹½Ó°Ôº Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Ä¢¹½Ó°Ôºâ€”an independent source of health policy research, polling, and journalism. Learn more about .

USE OUR CONTENT

This story can be republished for free (details).

While the concern about unscrupulous brokers enrolling unsuspecting people in ACA coverage has simmered for years, complaints have risen in recent months as consumers discover their health insurance coverage isn’t what they thought it was.

Now such unauthorized enrollments are also causing tax headaches. Returns are getting rejected by the IRS and some people will have to pay more in taxes.

“It’s definitely gotten worse over the past year. We’ve helped three to four dozen people this year already,” said Erin Kinard, director of systems and intake for the Health and Economic Opportunity Program at in North Carolina, which helps low-income families enroll in ACA plans and get tax help.

Neither the IRS nor the Centers for Medicare & Medicaid Services, which oversees the federal Obamacare marketplace, responded to questions about the problem.

The IRS did, however, in February instructing consumers on what to do if their electronically filed returns are rejected because of ACA issues.

Unauthorized sign-ups can happen in several ways, Kinard and others said. Some rogue agents troll online enrollment portals that are accessible only to brokers but are integrated with the healthcare.gov website. When those agents open a new policy or switch an already enrolled policyholder to a different plan, they garner the associated monthly commissions. Other consumers unwittingly sign up when they respond to advertisements touting gift cards or government subsidies then are transferred to agents who enroll them in health coverage. It’s happening even after new requiring agents to get written or recorded consent from clients before making changes.

CMS has not released details on how many consumers have been affected or how many agents have been sanctioned for participating in such schemes.

There’s also no public tally of how many taxpayers are facing problems as a result. And the tax consequences can come as a surprise.

“Many people are finding out when they go to e-file their taxes and it bounces back and the IRS says it can’t accept your return,” said Christine Speidel, an associate professor and the director of the at Villanova University’s Charles Widger School of Law.

Returns are rejected if the IRS has information indicating the taxpayer has ACA coverage but the returns don’t include forms that help determine whether paid on the policyholder’s behalf to insurers were correct. If their income was misstated by the rogue broker who enrolled them, for example, they might not have qualified for the full amount paid. Or, if they had affordable employer coverage, they would not have been eligible for ACA subsidies at all.

Ashley Zukoski, an ultrasound technologist in Charlotte, North Carolina, had employer coverage but now faces a tax bill for an ACA plan she said she never signed up for. She reached out to Ä¢¹½Ó°Ôº Health News after it reported on such unauthorized plan enrollments.

Unbeknownst to her, she said, a broker in Florida enrolled her family in an ACA plan in late February 2023, even though Zukoski had coverage starting that January through her job. The broker listed an income that qualified the household for a full subsidy, so Zukoski never received a premium bill.

Her first inkling that something was amiss came early in 2024 when she received a special form, , which showed she had an ACA plan. After reporting the problem to the federal marketplace, she sought to get the 1095-A voided so she would not be liable for the plan’s premium subsidies paid by the government to the insurer.

But, because Zukoski’s pharmacy had billed the ACA plan instead of her job-based coverage, her request was denied. She plans to appeal.

In the meantime, the family has filed an extension on their taxes.

“Instead of getting a $4,100 refund, we now owe almost $700 in taxes based on the 1095-A and premium tax credit applied,” Zukoski said.

With the April 15 federal tax filing deadline upon us, there are some important steps for affected consumers to take, tax and insurance experts said.

First, because it could take weeks to get corrected forms, experts recommend filing for an extension to buy more time. When consumers file for that extension, they should also pay any taxes owed to avoid penalties and interest.

In general, consumers who at any point in the year think they are victims of an unauthorized enrollment or plan switch should report it immediately to the relevant federal or state ACA marketplace and request a corrected Form 1095-A. But move fast. Appeals to cancel coverage retroactively must be made within 60 days of discovering the fraudulent enrollment, Speidel said.

Consumers can ask for help filing a complaint with federal or state regulators by contacting their own insurance agents or seeking help from assisters or “navigator” programs, which are government-funded nonprofit groups that help people enroll or deal with insurance problems.

Navigators and assisters are fielding many such cases this year and can submit what are called “complex case forms,” which help federal officials investigate such complaints, said Lynn Cowles, program manager for , a navigator program in Texas.

Ä¢¹½Ó°Ôº Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Ä¢¹½Ó°Ôºâ€”an independent source of health policy research, polling, and journalism. Learn more about .

USE OUR CONTENT

This story can be republished for free (details).

That raised concerns about the potential for misuse.

The access to policyholders’ personal information was one of the problems cited in a Ä¢¹½Ó°Ôº Health News article describing growing complaints about rogue agents enrolling people in ACA coverage, also known as Obamacare, or switching consumers’ plans without their permission in order to garner the commissions. The consumers are often unaware of the changes until they go to use their plan and find their doctors are not in the new plan’s network or their drugs are not covered.

Agent Joshua Brooker told Ä¢¹½Ó°Ôº Health News it was relatively easy for agents to access full Social Security numbers through the federal insurance marketplace’s enrollment platforms, warning that “bad eggs now have access to all this private information about an individual.”

On April 1, the morning the article was posted on NPR’s website, Brooker said, he got a call from the Centers for Medicare & Medicaid Services questioning the accuracy of his comments.

A CMS representative told him he was wrong and that the numbers were hidden, Brooker said April 7. “I illustrated that they were not,” he said.

After he showed how the information could be accessed, “the immediate response was a scramble to patch what was acknowledged as ‘problematic,’” Brooker posted to social media late last week.

Brooker has followed the issue closely as chair of a marketplace committee for the , a trade group.

After some phone calls with CMS and other technical experts, Brooker said, the federal site and direct enrollment partner platforms now mask the first six digits of the SSNs.

“It was fixed Wednesday evening,” Brooker told Ä¢¹½Ó°Ôº Health News. “This is great news for consumers.”

An April 8 written statement from CMS said the agency places the highest priority on protecting consumer privacy.

“Upon learning of this system vulnerability, CMS took immediate action to reach out to the direct enrollment platform where vulnerability was identified to make sure it was addressed,” wrote Jeff Wu, acting director of the Center for Consumer Information & Insurance Oversight at CMS.

He added that the Social Security numbers were not accessible through routine use of the platform but were in a portion of the site called developer tools. “This issue does not impact healthcare.gov,” Wu wrote.

Brooker’s concern about Social Security numbers centered on access by licensed agents to existing policyholder information though the federal marketplace, not including the parts of healthcare.gov used by consumers, who cannot access anything but their own accounts.

While consumers can enroll on their own, many turn to agents for assistance. There are about 70,000 licensed agents nationwide certified to use the healthcare.gov site or its partner enrollment platforms. They must meet certain training and licensing requirements to do so. Brooker has been quick to say it is a minority of agents who are causing the problem.

But agents increasingly are frustrated by what they describe as a sharp increase during the second half of 2023 and into 2024 of unscrupulous rivals switching people from one plan to another, or at least switching the “agent of record” on the accounts, which directs the commission to the new agent. Wu’s statements have so far not included requested information on the number of complaints about unauthorized switching, or the number of agents who have been sanctioned as a result.

The changes shielding the Social Security numbers are helpful, Brooker said, but won’t necessarily slow unauthorized switching of plans. Rogue agents can still switch an enrollee’s plan with simply their name, date of birth, and state of residence, despite rules that require agents to collect written or recorded consent from consumers before making any changes.

Ä¢¹½Ó°Ôº Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Ä¢¹½Ó°Ôºâ€”an independent source of health policy research, polling, and journalism. Learn more about .

USE OUR CONTENT

This story can be republished for free (details).

“We think it’s urgent and it requires a lot more attention and resources,” said Jennifer Sullivan, director of health coverage access for the Center on Budget and Policy Priorities.

The Centers for Medicare & Medicaid Services, which oversees the ACA, “has acknowledged the issue,” said former Oklahoma insurance commissioner John Doak. “But it appears their response is inadequate.”

The reactions follow a Ä¢¹½Ó°Ôº Health News article outlining how licensed brokers’ easy access to policyholder information on healthcare.gov has led unscrupulous agents to switch people’s policies without express permission. Those agents can then take the commission that comes with signing a new customer. Dozens of people and insurance brokers responded to the earlier report recounting similar situations.

Some switched policyholders end up in plans that don’t include their doctors or the medications they regularly take, or come with higher deductibles than their original coverage choice. If their income or eligibility for premium tax credits is misrepresented, some people end up owing back taxes.

Agents whose clients have been affected say the switches ramped up last year and are continuing into 2024, although quantifying the problem continues to be difficult. The problem seems concentrated on the federal healthcare.gov website, which is the marketplace where people in 32 states buy ACA plans, which are also known as Obamacare. CMS declined to provide the number of complaints that have been filed.

Even so, CMS representatives said during a December committee meeting of the National Association of Insurance Commissioners that they were “acutely aware” of the problem and were working on solutions.

A similar NAIC gathering was held in March. During those meetings, state regulators urged CMS officials to look for unauthorized switches, rather than reacting only to filed complaints. State regulators also want the agency to tell them sooner about agents or brokers under investigation, and to be provided with the number of affected consumers in their regions.

In an April 4 written statement to Ä¢¹½Ó°Ôº Health News, Jeff Wu, acting director of CMS’ Center for Consumer Information & Insurance Oversight, pointed to the agency’s sharp prohibition on agents enrolling people or changing their plans without getting written or recorded consent, and said his team is “analyzing potential additional system controls to block unauthorized or fraudulent activity.”

It is also working with state regulators and large broker agencies, Wu wrote, to identify “the most effective ways to root out bad actors.” He also said more agents and brokers are being suspended or terminated from healthcare.gov.

Wu did not provide, however, a tally of just how many have been sanctioned.

Low-income consumers are often targeted, possibly because they qualify for zero-premium plans, meaning they might not know they’ve been switched or enrolled because they aren’t paying a monthly bill.

Also, rules took effect in 2022 that allow low-income residents to enroll at any time of the year, not just during the annual open enrollment period. While the change was meant to help people who most need to access coverage, it has had the unintended effect of creating an opportunity for this scheme to ramp up.

“There have been bad apples out there signing people up and capturing the commissions to do so for a while, but it’s exacerbated in the last couple of years, turning it from a few isolated incidents to something more common,” said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University.

Many victims don’t know they’ve been switched until they try to use their plans — either because agents changed the policy without talking to them or because the consumer unknowingly enrolled by responding to online advertisements promising gift cards, government subsidies, or free health insurance.

The challenge now is how federal regulators and their counterparts in the states can thwart the activity without diminishing enrollment — a top priority for the marketplace. In fact, are being touted prominently in President Joe Biden’s .

Thwarting the switches “really comes down to oversight and enforcement,” Corlette said. “As soon as regulators identify someone who is engaged in unauthorized plan-switching or enrollment, they need to cut them off immediately.”

That isn’t simple.

For starters, consumers or their agents must report suspected problems to state and federal regulators before investigations are launched.

Such investigations can take weeks and states generally don’t have access to complaints until federal investigators finish an inquiry, state regulators complained during the NAIC meetings.

Doak attended the December meeting, where he urged federal regulators to look for patterns that might indicate unauthorized switching — such as policyholders’ coverage being changed multiple times in a short period — and then quickly initiate follow-up with the consumer.

“All regulators have a duty to get on top of this issue and protect the most vulnerable consumers from unknowingly having their policies moved or their information mistreated,” Doak told Ä¢¹½Ó°Ôº Health News. He is now executive vice president of government affairs for Insurance Care Direct, a health insurance brokerage.

Being more proactive requires funding.

Wu said the agency’s administrative budget has remained nearly flat for 13 years even as enrollment has grown sharply in the ACA and the other health programs it oversees.

And the complaint process itself can be cumbersome because it can involve different state or federal agencies lacking coordination.

Even after complaints are filed, state or federal officials follow up directly with the consumer, who might have limited English proficiency, lack an email address, or simply not answer their phone — which can stall or stop a resolution, said Katie Roders Turner, executive director of the Family Healthcare Foundation, a Tampa Bay, Florida, nonprofit that helps people enroll or deal with problems that arise with their plans.

Suggested improvements include creating a central form or portal for complaints and beefing up safeguards on the healthcare.gov site to prevent such unauthorized activity in the first place. 

Currently, licensed agents need only a name, date of birth, and state of residence to access policyholder information and make changes. That information is easy to obtain.

States that run their own marketplaces — there are 18 and the District of Columbia — often require more information, such as a one-time passcode sent to the consumer, who then gives it to their chosen agent.

In the meantime, the frustration is increasing.

Lauren Phillips, a sales agent in Georgia, said she reached out to an agent in Florida who was switching one of her clients, asking her to stop. When it happened again to the same client, she reported it to regulators.

“Their solution was for me to just watch the policy and fix it if it happens again, which is not a viable solution, “Phillips said.

Recently, after noticing the client’s policy had been switched again, she reported it and changed it back. When she checked two mornings later, the policy had been terminated.

“Now my client has no insurance at all,” Phillips said. “They say they are working on solutions. But here we are in the fourth month of the year and agents and consumers are still suffering at the hands of these terrible agents.”

Ä¢¹½Ó°Ôº Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Ä¢¹½Ó°Ôºâ€”an independent source of health policy research, polling, and journalism. Learn more about .

USE OUR CONTENT

This story can be republished for free (details).

It happened to Michael Debriae, a restaurant server who lives in Charlotte. Unbeknownst to him, an agent in Florida with whom he’d never spoken enrolled him in an ACA plan in March 2023. Debriae had insurance through his job and discovered the Obamacare coverage only when his longtime pharmacy rejected a 90-day refill because the ACA plan didn’t allow it.

He filed a complaint with the federal marketplace and canceled the plan. But because the pharmacy had billed the ACA plan for other prescriptions, federal investigators told him they couldn’t retroactively cancel his coverage. He got stuck with a $700 tax bill — his entire tax refund, he said — for some of the tax credits the IRS paid his Obamacare insurer from March until July.

The ACA saw record enrollment for this year of more than 21 million people, but growing complaints from consumers like Debriae and agents who say they’ve lost clients to unauthorized switches cast a shadow on that achievement, a Ä¢¹½Ó°Ôº Health News investigation found.

On Feb. 26, the Centers for Medicare and Medicaid Services sent an “unauthorized plan switch” update to insurance industry representatives acknowledging “a large number” of 2024 cases and outlining technical efforts to resolve problems.

“CMS is committed to protecting consumers in the marketplace,” Jeff Wu, deputy director for policy for the Center for Consumer Information & Insurance Oversight at CMS, said in a March statement.

Wu’s office didn’t disclose the number of complaints that have been filed or how many brokers it has sanctioned. CMS reports enforcement actions to state insurance departments, whose authority includes revoking licenses, Wu’s statement said.

Brokers say the ease with which unscrupulous agents can get into policyholder accounts in the 32 states served by the federal marketplace plays a major role in the problem. With only a person’s name, date of birth and state, a licensed agent can access a policyholder’s coverage through the federal exchange or its direct enrollment platforms. It’s harder to do in ACA marketplaces run by states, which often require additional information.

Federal regulators  in June that require brokers to get policyholders’ written or recorded verbal consent before making changes to their coverage. But brokers say they’re rarely asked to provide that documentation to regulators.

CMS is “actively considering further regulatory and technological solutions,” Wu said.

Many state-run exchanges do more than the federal marketplace to secure accounts. In Colorado, for example, customers specify which brokers can have access. California sends a one-time passcode to enrollees to provide to their agents.

Jonathan Kanfer, an insurance broker in West Palm Beach, Fla., says his agency lost 700 clients to unauthorized plan switches. He said he’s had telemarketers offer him lists of potential clients, telling him, “You don’t even have to speak with the people.”

He turns them down, but he said rival agents might be enticed by the opportunity to collect the monthly commissions that insurers pay.

This article is not available for syndication due to republishing restrictions. If you have questions about the availability of this or other content for republication, please contact NewsWeb@kff.org.

Ä¢¹½Ó°Ôº Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Ä¢¹½Ó°Ôºâ€”an independent source of health policy research, polling, and journalism. Learn more about .

USE OUR CONTENT

This story can be republished for free (details).

Do you have experience with ACA plan-switching or a related enrollment issue you’d like to share? to tell your story.

Unauthorized enrollment or plan-switching is emerging as a serious challenge for the ACA, also known as Obamacare. Brokers say the ease with which rogue agents can get into policyholder accounts in the 32 states served by the federal marketplace plays a major role in the problem, according to an investigation by Ä¢¹½Ó°Ôº Health News.

Indeed, armed with only a person’s name, date of birth, and state, a licensed agent can access a policyholder’s coverage through the federal exchange or its direct enrollment platforms. It’s harder to do through state ACA markets, because they often require additional information.

“It’s rampant. It’s horrible,” said Ronnell Nolan, president of , a nonprofit trade association representing independent insurance brokers.

The growing outcry from agents who have had their clients switched by rivals — which can steer monthly commissions to the new agent — casts a shadow on what otherwise has been a record year for ACA enrollment. More than 21 million people signed up for 2024 coverage.

Federal regulators are aware of the increase in unauthorized switching and say they have taken steps to combat it. It’s unclear, though, if these efforts will be enough.

On Feb. 26, the Centers for Medicare & Medicaid Services sent a “plan switch update” to industry representatives acknowledging “a large number” of 2024 cases and outlining some of its technical efforts to resolve problems when complaints are lodged.

“CMS is committed to protecting consumers in the marketplace,” said Jeff Wu, deputy director for policy for CMS’ Center for Consumer Information & Insurance Oversight, in a written statement to Ä¢¹½Ó°Ôº Health News.

His office refused to provide details on how many complaints it has seen or the number of agents it has sanctioned but his statement said when action is taken, CMS reports it to state insurance departments, whose authority includes revoking licenses.

Wu did not answer specific questions about whether two-factor authentication or other safeguards would be added to the federal website, though he wrote that CMS is “actively considering further regulatory and technological solutions to some of these problems.”

In June, that require brokers to get policyholders’ written or recorded verbal consent before making changes, although brokers said they are rarely asked for those documents.

Finding Out the Hard Way

Some unwitting enrollees, like Michael Debriae, a restaurant server who lives in Charlotte, North Carolina, not only end up in plans they didn’t choose but also bear a tax burden.

That happens when enrollees are signed up for coverage that includes premium tax credits paid by the government to insurers, even though the enrollee is ineligible, either because their income was misstated by the broker making the switch, or they had job-based insurance, like Debriae.

Unbeknownst to him, an agent in Florida with whom he had never spoken enrolled him in an ACA plan in March 2023. It was two months after he canceled his Obamacare coverage because he was able to get health insurance through his job. In June, he discovered he had a new ACA policy when his longtime pharmacy said it could not fill a 90-day prescription, which it had done with no problem in the past.

“That’s when I realized something horribly wrong had happened,” said Debriae.

Debriae got contact information for the Florida broker, but when he called, the office said the agent no longer worked there. He filed a complaint with the federal marketplace and canceled the plan. But he still owed the IRS part of the $2,445 in premium tax credits paid to the insurer from March until July on his behalf.

To be sure, some switches could be legitimate, when enrollees choose a different broker or plan. And agents do have a vested interest in raising the issue. They lose out on commissions when their clients are switched by other agents. But brokers whose clients have been switched through unauthorized transactions say the real losers are consumers.

“People literally losing their plans is fraud, absolute fraud, not a squabble between agents,” said Leslie Shields, an insurance broker in Fort Worth, Texas.

Patients’ new plans might not include their doctors or might come with higher deductibles than their former coverage. Because the agent on the policy is generally switched, too, enrollees don’t know whom to call for help.

“You have surgeries that can’t happen, providers that can’t be seen, or have been changed,” said Shields. “, but now it’s literally the worst I’ve seen.”

Ease of access to policyholders’ accounts on the federal marketplace is a double-edged sword, agents say: It aids enrollment, but also makes it easier to switch plans without consent.

“Those bad eggs now have access to all this private information about an individual,” including household income, Social Security numbers, and dependents, said Joshua Brooker, a broker who follows the issue closely as chair of a marketplace committee for the , a trade group.

Complaints gained momentum during the most recent open enrollment period, agents say. One worker in a government office that helps oversee operations of the federal exchange told Ä¢¹½Ó°Ôº Health News of personally handling more than 1,200 complaints about unauthorized switches or enrollments in the past three months, averaging about 20 a day. About 30 co-workers are working on similar complaints. It can take multiple days to resolve the most urgent cases, and two to four weeks for those deemed less urgent, the worker said.

Florida, Georgia, and Texas appear to be plan-switching hotbeds, agents say. Florida and Texas officials referred questions to federal regulators. Bryce Rawson, press secretary for the Georgia Department of Insurance, says the state saw no switching complaints last year and has about 30 so far in 2024, a small number but one it is taking seriously: “It’s still an active and ongoing investigation.”

By contrast, states that run their own marketplaces — there are 18 and the District of Columbia that do — have been more successful in thwarting such efforts because they require more information before a policy can be accessed, Brooker said.

In Colorado, for example, customers create accounts on the state’s online market and can choose which brokers have access. Pennsylvania has a similar setup. California sends a one-time password to the consumer, who then gives it to the agent before any changes can be made.

Adding such safeguards to healthcare.gov could slow the enrollment process. Federal regulators are “trying to thread a needle between making sure people can get access to coverage and also providing enough of a barrier to capture anyone who is coming in and acting nefariously,” said Brooker.

How Does It Happen?

Many people have no idea how they were targeted, agents say.

Jonathan Kanfer, a West Palm Beach, Florida, agent, suspects names and lists of potential clients are being circulated to agents willing to bend the rules. He said his agency has lost 700 clients to switching.

The agents doing the switching “don’t care about the people,” Kanfer said, only the money, which can amount to a monthly commission of roughly $20 to $25 per enrollee.

“Two weeks ago, someone telemarketed me, gave me a number to call to get leads for Obamacare,” said Kanfer, who turned down the offer. The person told him: “You don’t even have to speak with the people.”

Online or is a way some outfits troll for prospects, who then end up on lists sold to brokers or are contacted directly by agents. Such lists are not illegal. The problem is the ads are often vague, and consumers responding may not realize the ads are about health insurance or might result in their policies being changed. Such ” worth up to $6,400, often implying the money can help with groceries, rent, or gas. Some do mention “zero-dollar” health insurance.

Yet agents say the ads are misleading because the “subsidies” are actually the premium tax credits many people who enroll in ACA plans are eligible for, based on their income.

“They’re portraying it like it’s money going into your pocket,” said Lauren Jenkins, who runs an insurance brokerage in Coweta, Oklahoma, and has seen about 50 switching cases in recent months. But the money goes to insurers to offset the price of the new plan — which the consumer may not have wanted.

Ambetter Health — a division of Centene that offers ACA plans in more than two dozen states — sent email alerts to brokers in September and November. One noted a jump in complaints “stemming from misleading advertisements.” Another warned of “termination actions” against bad actors and directed agents not to collect consumer information or consent via “online forms or social media ads.”

In response to the switching, Ambetter also instituted a “lock” on policies starting at midnight on Dec. 31, meaning the agent on the policy by that deadline would remain on it for all of 2024, according to an email the insurer sent to brokers.

Results are mixed.

Adam Bercowicz, a licensed independent broker in Fort Lauderdale, Florida, said he and his staff worked New Year’s Eve, monitoring their client lists and watching as some were switched before their eyes.

“If I saw one of my clients was stolen from me at, let’s say, 11:57 p.m., I put myself back on,” said Bercowicz, who estimates he’s had 300 to 400 policies overtaken by other agents not connected to his staff in recent months. “And by 11:58 — a minute later — they were already switched back.”

Ä¢¹½Ó°Ôº Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Ä¢¹½Ó°Ôºâ€”an independent source of health policy research, polling, and journalism. Learn more about .

USE OUR CONTENT

This story can be republished for free (details).

More than 100 million Americans don’t have regular access to primary care, a number that has nearly doubled since 2014. Yet demand for primary care is up, spurred partly by record enrollment in Affordable Care Act plans. Under pressure from increased demand, consolidation, and changing patient expectations, the model of care no longer means visiting the same doctor for decades.

Ä¢¹½Ó°Ôº Health News senior correspondent Julie Appleby breaks down what is happening — and what it means for patients.

Primary Care Disrupted

Known as the “front door” to the health system, primary care is changing. Under pressure from increased demand, consolidation, and changing patient expectations, the model of care no longer means visiting the same doctor for decades. Ä¢¹½Ó°Ôº Health News looks at what this means for patients.

Credits

Ä¢¹½Ó°Ôº Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Ä¢¹½Ó°Ôºâ€”an independent source of health policy research, polling, and journalism. Learn more about .

USE OUR CONTENT

This story can be republished for free (details).

The issue is whether coupons and other copay aid many patients get from drugmakers should count toward annual insurance deductibles and out-of-pocket spending limits, enabling them to more quickly get fuller coverage for their medicines or other care. Insurers and employers gripe that the assistance is just a marketing ploy, intended to keep patients on costlier drugs even when cheaper alternatives are available.

But caught in the middle are people like Jennifer Hepworth of Eagle Mountain, Utah, who uses drugmaker assistance programs to pay for multiple prescriptions for herself and her daughter. Patients “are the ones losing out every time in this war between these two mega-industries,” Hepworth said.

Hepworth’s family used to be able to almost immediately hit their annual deductible by using drugmaker coupons for co-payments. By midyear, they’d hit their out-of-pocket maximum of $10,000 and no longer have any co-payments at all.

Then the insurance plan managing her husband’s employer coverage made a key change: It adopted a practice called “co-payment accumulator” that prevented those drug coupons from being counted toward deductibles.

All of a sudden, Hepworth’s family had to pay thousands of dollars out-of-pocket toward their deductible.

“Everything went on credit cards,” she said. And it took a lot longer to hit the out-of-pocket maximum.

The insurance industry says it can’t allow drugmaker financial assistance to count toward deductibles without affecting monthly premiums. It’s “a vital tool in keeping health insurance affordable,” the Blue Cross Blue Shield Association said in a.

 are in plans that use these kinds of programs, according to Avalere, a consulting firm. But some politicians aren’t buying it. Nineteen states now limit copay accumulator programs for some insurance plans — though not those of large employers that cover most workers..

And bipartisan legislation introduced in both chambers of Congress would require drugmaker financial assistance to be counted toward insurer deductibles and out-of-pocket limits.

Called the, it would apply to most plans, including those exempt from state rules, such as those of large employers.

On top of all that, patient advocacy groups  last December against copay accumulator programs in the U.S. District Court for D.C.

Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, said essentially overturns a provision of a Centers for Medicare and Medicaid Services rule started late in the Trump administration that allowed insurers to expand the practice to almost any drug. Previous rules from 2020 would now be in effect, Schmid said, requiring copay assistance to count toward the deductible for all drugs for which there is no medically appropriate generic alternative available.

Even so, changes for many insured patients may take a while.

The Biden administration  of the decision on the Trump-era regulation in January, but it has filed motions saying that “it does not intend to take any enforcement action against issuers or plans” until regulators draw up new rules, according to Ellen Montz, deputy administrator and director of the Center for Consumer Information and Insurance Oversight at CMS.

This article is not available for syndication due to republishing restrictions. If you have questions about the availability of this or other content for republication, please contact NewsWeb@kff.org.

Ä¢¹½Ó°Ôº Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Ä¢¹½Ó°Ôºâ€”an independent source of health policy research, polling, and journalism. Learn more about .

USE OUR CONTENT

This story can be republished for free (details).

That must be a mistake, she told the pharmacy. But it wasn’t. It turned out that the health insurance plan through her husband’s job had a new program in which it stopped applying any financial assistance they received from drugmakers to the family’s annual deductible.

Insurers or employers can tap into funds provided to patients by drugmakers through copay assistance programs, which were designed by the companies to help patients afford increasingly expensive medications. But, because those payments are no longer counted toward the deductible, patients must pay an amount out-of-pocket, too, often for the same drugs. Those deductibles or other out-of-pocket costs can easily run into thousands of dollars.

Here’s what that meant for Hepworth, who lives in Utah. Before the change, the drugmaker’s copay assistance would almost immediately meet her family’s deductible for the year, because both Hepworth and her daughter need expensive medications. As a result, the family was responsible for copays of only 20% of their medical costs instead of the 100% required by their plan until they met their deductible. By the middle of the year, the family would have reached the plan’s out-of-pocket maximum of nearly $10,000 and would no longer owe any copays.

Hepworth ended up paying the $3,500 to the pharmacy, equivalent to the family’s annual deductible, because she didn’t want to stop giving her daughter a treatment that could extend her life. “We were struggling and everything went on credit cards.”

Why did the insurer do this?

Employers or the health insurance plans they hire are saving 10% to 15% of the cost of prescription plan claims by using these copay accumulator programs, said Edward Kaplan, a , a benefits consulting firm. Even so, Kaplan doesn’t recommend that his clients, who include public and private employers, take advantage of the program because of the increasing pushback from lawmakers and advocacy groups. However, are in plans governed by these types of programs, according to Avalere, a consulting firm.

now limit copay accumulator programs for some insurance plans. And patient advocacy groups against the programs. States’ limits on the practice, however, do not apply to larger, self-insured job-based plans, through which many Americans have coverage.

Bipartisan legislation has been introduced in both chambers of Congress that would require financial assistance to count toward deductibles and other out-of-pocket costs. Called the , it would govern plans that are exempt from state rules.

Change is unlikely to come soon.

Insurers and employers have long complained that copay assistance programs are mainly a marketing ploy by the drug industry that encourages patients to stay on costly drugs when lower-cost alternatives might be available. Insurers say capturing more of that money themselves can help slow the rising price of premiums.

In a , the Blue Cross Blue Shield Association called the practice “a vital tool in keeping health insurance affordable.”

Patient advocacy groups, including the and two diabetes groups, disagreed and took a case against copay accumulator programs to U.S. District Court last fall.

And “we won,” said Carl Schmid, executive director of the institute. The groups argued the practice can cause some patients to skip their medications because of the unexpected costs they must now shoulder.

Some critics say it’s a form of double dipping because even though the patient hasn’t personally paid out-of-pocket, “that payment was made, and it was made on your behalf. I think that should get counted,” said Rachel Klein, deputy executive director with the , an advocacy group.

, Schmid said, essentially overturns a 2021 provision in Centers for Medicare & Medicaid Services rules that allowed insurers to expand the practice to cover almost any drug. Previous rules from 2020 would now be in effect, said Schmid, and those rules say copay assistance should count toward the deductible for all drugs for which there is no medically appropriate generic alternative available.

Even so, billing changes for many insured patients may take a while.

While the Biden administration of the court decision, it has filed motions noting “it does not intend to take any enforcement action against issuers or plans” until regulators draw up new rules, said Ellen Montz, deputy administrator and director of the Center for Consumer Information and Insurance Oversight at CMS, in a written statement to Ä¢¹½Ó°Ôº Health News.

A version of these programs being used by insurers, sometimes called a “maximizer,” works a bit differently.

Under a maximizer program, insurers partner with outside firms such as and . The programs declare certain drugs or classes of drugs “nonessential,” thus allowing them to circumvent some Affordable Care Act rules that limit patient cost sharing. That lets the insurer collect the maximum amount from a drugmaker’s assistance program, even if that is more than the patient would owe through deductibles or out-of-pocket maximums had the drugs remained essential benefits. These partner companies also work with large pharmacy benefit managers that oversee prescription services for employers.

Those maximizer payments do not count toward a patient’s deductible. Many insurers don’t charge patients an additional copay for the drugs deemed nonessential as a way of enticing them to sign up for the programs. If patients choose not to enroll, they could face a copayment far higher than usual because of the “nonessential” designation.

“This is a loophole in the ACA that they are exploiting,” said Schmid of the HIV+Hepatitis Policy Institute, referring to the Affordable Care Act. Johnson & Johnson filed a lawsuit in federal court in New Jersey in 2022 against such a maximizer program, saying it coerced patients into participating because if they didn’t they faced higher copays. The drugmaker warned it might reduce the amount of overall assistance available to patients because of the increasingly common practice.

Now, though, a provision in the governing health insurers says plans must consider any covered drug an “essential benefit.” If finalized, the provision would hamper insurers’ ability to collect the maximum amount of drugmaker assistance.

Employers are watching for the outcome of the lawsuit and the proposed federal rules and don’t yet have clarity on how rulings or regulations will affect their programs, said James Gelfand, president and chief executive of the ERISA Industry Committee, which advocates for large, self-insured employers.

Ä¢¹½Ó°Ôº Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at Ä¢¹½Ó°Ôºâ€”an independent source of health policy research, polling, and journalism. Learn more about .

USE OUR CONTENT

This story can be republished for free (details).