Finance Chairman Pledges Legislative Action to Hold Brokers and Insurance Agencies Criminally Responsible for Fraud (Bad Actors)
Sen. Ron Wyden (D-Ore.) chair of the Senate Finance Committee addressed CMS:
“I write to express my outrage with reports that agents and brokers are submitting plan changes and enrollments in the Federal marketplace without the consent of the people who rely on these plans. These plan changes and enrollments result in tangible harm to people including uncovered medical expenses, loss of coverage, and disruptions in care, and an unexpected tax liability that could be thousands of dollars out of their own pockets. Access to affordable health coverage is necessary for good health and should not be exploited by fraudsters to collect illicit commissions at the expense of working Americans. Therefore, I urge you to hold brokers who submit fraudulent enrollments accountable to the full extent of your authority by imposing civil monetary penalties and to take additional steps to protect consumers.
Congress established financial penalties in Section 1411(h) of the ACA to hold individuals who submit fraudulent information in an application for a qualified health plan at “not more” than $250,000 for knowing and willful violations. The ACA already gives CMS authority to fine misleading marketers up to $250,000
I appreciate the Centers for Medicare & Medicaid Services (CMS) statement from May 6, 2024 addressing this issue and approach to resolving the 40,000 complaints of unauthorized plan switches and 50,000 complaints of unauthorized enrollments in the first three months of 2024. Ensuring that consumers are held harmless and enrolled in the plan they choose is of the utmost importance. However, CMS must do more and you must do it now.“
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Look for more information from IPHCA as this issue unwinds.
Wyden, chair of the Senate Finance Committee, said he plans to introduce legislation that allows federal regulators to hold sellers criminally responsible for improper exchange plan sign-ups and switches. The Affordable Care Act already gives CMS the authority to fine misleading marketers up to $250,000, but the agency has not used that authority.
In a statement this month, CMS said it was considering issuing civil monetary penalties for unscrupulous agents and brokers in response to a rise in reports of people being enrolled in unauthorized policies. During the first three months of the year, CMS said it received approximately 40,000 complaints from people who had unknowingly been switched to new exchange plan policies, and an additional 50,000 complaints of unauthorized enrollments during the annual sign-up period for 2024. Regulators said they have worked to resolve almost all of these complaints and canceled members’ enrollments, reimbursed them for claims costs incurred, and sent consumers’ updated financial information to the Internal Revenue Service.
Consumers who believe they may have been a victim of unauthorized agent or broker activity associated with a Marketplace plan should call the Marketplace Call Center at 1-800-318-2596.
Assisters can also report cases through the Complex Case web form or by calling the Marketplace Call Center. Consumers are also encouraged to file a complaint with the Indiana Department of Insurance.
