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Unauthorized Enrollments Cast a Shadow Over Obamacare Enrollment Record – KFF Health News

The Biden administration faces what appears to be a growing problem for the federal Affordable Care Act’s insurance exchange: Unsavory insurance brokers signing up people who don’t need coverage or making them switch to new diets without their permission.

It happened to Michael Debriae, a restaurant server who lives in Charlotte. Unbeknownst to him, an agent in Florida he had never spoken with enrolled him in an ACA plan in March 2023. Debriae had insurance through his job and only learned about Obamacare coverage when his longtime pharmacy Date denied a 90-day renewal because the ACA plan did not 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 found himself stuck with a $700 tax bill – his entire tax refund, he said – for some of the tax credits the IRS paid to his Obamacare insurer from March to July.

The ACA recorded a record number of registrations for this year, with more than 21 million people, but growing complaints from consumers like Debriae and agents who say they’ve lost business to unauthorized switches cast a shadow over this successa KFF Health News investigation revealed.

On February 26, the Centers for Medicare and Medicaid Services sent a “Unauthorized plan change” update to representatives of the insurance industry, acknowledging “a large number” of cases occurring in 2024 and describing technical efforts to resolve the problems.

“CMS is committed to protecting consumers in the marketplace,” Jeff Wudeputy director of policy Consumer Information and Insurance Monitoring Center at CMS, said in a March statement.

Wu’s office did not disclose the number of complaints filed or the number of brokers sanctioned. CMS reports enforcement actions to state insurance departments, whose authority includes revoking licenses, Wu’s statement said.

Brokers point out the ease with which unscrupulous agents can access policyholders’ accounts in the United States. 32 states served by the federal market plays a major role in the problem. With just 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. This is more difficult to do in state-run ACA marketplaces, which often require additional information.

Federal regulators imposed new rules in June, which require brokers to obtain written or recorded verbal consent from policyholders before making changes to their coverage. But brokers say they are rarely asked to provide this documentation to regulators.

CMS is “actively considering other regulatory and technology solutions,” Wu said.

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

Jonathan KanferWest Palm Beach, Fla., insurance broker says his agency lost 700 customers unauthorized plan changes. He said telemarketers offered him lists of potential customers, telling him: “You don’t even have to talk to people.”

He refuses them, but he believes that competing agents could be attracted by the possibility of collecting the monthly commissions paid by insurers.


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