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\u2019s coverage: rogue brokers who have signed people up for Affordable Care Act plans, or switched them into new ones, without their permission.<\/p>\n

Fighting the problem presents tension for the administration: how to thwart the bad actors without affecting ACA sign-ups.<\/p>\n

Complaints about these unauthorized changes \u2014 which can cause affected policyholders to lose access to medical care, pay higher deductibles, or even incur surprise tax bills \u2014 rose sharply in recent months, according to brokers who contacted KFF Health News<\/a> and federal workers who asked not to be identified.<\/p>\n

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\u2019t always have up-to-date contact information.<\/p>\n

\u201cWe\u2019ve given them a whole host of ideas,\u201d she said. \u201cThey say, \u2018Be careful what you wish for.\u2019 But we don\u2019t mind going an extra step if you can stop this fraud and abuse, because clients are being hurt.\u201d<\/p>\n

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Some consumers are pursued<\/a> 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.<\/p>\n
Federal regulators have declined to say how many complaints about unauthorized sign-ups or plan switches they\u2019ve received, or how many insurance agents they\u2019ve sanctioned as a result. But the problem is big enough that CMS says it\u2019s working on technological and regulatory solutions. Affected consumers and agents have filed a civil lawsuit<\/a> in federal district court in Florida against private-sector firms allegedly involved in unauthorized switching schemes.<\/p>\n
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<\/a> 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.<\/p>\n
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\u2019 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.<\/p>\n
\u201cThat is the knife edge the administration has to walk,\u201d said Corlette, \u201cprotecting consumers from fraudulent behavior while at the same time making sure there aren\u2019t too many barriers.\u201d<\/p>\n
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\u2019 ability to enroll, and how fast they could be implemented.<\/p>\n
The agency is also working closely, he wrote, with insurance companies, state insurance departments, and law enforcement \u201cso that agents violating CMS rules or committing fraud face consequences.\u201d And it is reaching out to states that run their own ACA markets for ideas.<\/p>\n
That\u2019s 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 \u2014 some use two-factor authentication \u2014 before agents can access policyholder information.<\/p>\n
California, for example, allows consumers to designate an agent and to \u201clog in and add or remove an agent at will,\u201d said Robert Kingston, interim director of outreach and sales for Covered California, the state\u2019s 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.<\/p>\n
By contrast, agents can more easily access policyholder information when using private-sector websites that link them to the federal ACA market \u2014 all they need is a person\u2019s name, date of birth, and state of residence \u2014 to enroll them or switch their coverage.<\/p>\n
CMS has approved dozens<\/a> of such \u201cenhanced direct enrollment\u201d websites run by private companies, which are designed to make it easier and faster for agents certified to offer insurance through healthcare.gov.<\/p>\n
Rules went into effect<\/a> last June requiring agents to get written or recorded consent from clients before enrolling them or changing their coverage, but brokers say they\u2019re rarely asked to produce the documentation. If CMS makes changes to healthcare.gov \u2014 such as adding passcodes, as California has \u2014 it would need to require all alternative-enrollment partners to do the same.<\/p>\n
The largest is San Francisco-based HealthSherpa, which assisted 52% of active enrollments nationally for this year, said CEO George Kalogeropoulos.<\/p>\n
The company has a 10-person fraud investigation team, he said, which has seen \u201ca significant spike in concerns about unauthorized switching.\u201d They report problems to state insurance departments, insurance carriers, and federal regulators \u201cand refer consumers to advocates on our team to make sure their plans are corrected.\u201d<\/p>\n
Solutions must be \u201ctargeted,\u201d he said. \u201cThe issue with some of the solutions proposed is it negatively impacts the ability of all consumers to get enrolled.\u201d<\/p>\n
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\u2019t charge consumers; instead, they receive commissions from insurers participating in state and federal marketplaces for each person they enroll in a plan.<\/p>\n
While California officials say their additional layers of authentication have not noticeably affected enrollment numbers, the state\u2019s recent enrollment growth has been slower<\/a> than in states served by healthcare.gov.<\/p>\n
Still, Covered California\u2019s 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, falling to 6.5% in 2022<\/a>, according to data compiled by KFF. That year, the share of people uninsured nationwide was 8%.<\/p>\n
Corlette said insurers have a role to play, as do states and CMS.<\/p>\n
\u201cAre there algorithms that can say, \u2018This is a broker with outlier behavior\u2019?\u201d Insurance companies could then withhold commissions \u201cuntil they can figure it out,\u201d she said.<\/p>\n
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.<\/p>\n
CMS could also set limits on plan switches, as there is generally no legitimate need for multiple changes in a given month, Schultz said.<\/p>\n
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