Julie Appleby, KFF Health News
Florida resident Keith Jones says his Affordable Care Act insurance coverage plan was modified a number of instances this yr with out his permission. Now the 52-year-old is struggling together with his well being issues whereas dealing with giant premium payments he says he shouldn’t owe.
The third time, he sought assist from an insurance coverage agent, who obtained Jones on the telephone with the federal healthcare.gov name heart to kind issues out. During that decision, “literally, there was someone opening a new policy without my consent,” Jones mentioned.
Despite new guidelines that went into effect in mid-2024 aimed toward thwarting such unauthorized ACA adjustments, it’s nonetheless occurring, mentioned Florida-based agent Jason Fine, who’s making an attempt to assist Jones and dozens of different purchasers unravel such switches.
The Government Accountability Office, an unbiased authorities watchdog, on Dec. 3 issued a sharply critical, though preliminary, report saying that years of comparable GAO warnings to federal officers haven’t produced outcomes wanted to raised defend in opposition to ACA enrollment fraud. Alarms had been raised throughout the Obama and Biden administrations, in addition to the primary Trump administration.
There had been more than 275,000 complaints to the Centers for Medicare & Medicaid Services about unauthorized ACA enrollments and plan-switching in 2024, based on the company, which additionally administers Obamacare protection.
“The absolute bottom line is nothing has changed in terms of risk,” Seto J. Bagdoyan, a co-author of the GAO report, mentioned in an interview with KFF Health News. Bagdoyan is the director of audit providers for the company’s Forensic Audits and Investigative Service crew.
The report landed as Congress continues to be embroiled within the concern of whether or not to increase the extra beneficiant tax subsidies which have given shoppers further assist paying their Obamacare premiums in recent times. Some ACA critics have mentioned the subsidies fuel enrollment fraud.
Citing fraud issues, GOP lawmakers included measures of their One Big Beautiful Bill Act that can make it tougher to enroll in ACA plans in future years, akin to requiring additional eligibility verification. But lawmakers haven’t adopted legislation introduced by Democrats to impose prison penalties on brokers who knowingly submit false data on ACA enrollments.
“None of the Republicans making political hay out of this report have co-sponsored that legislation or offered any similar measures,” Sen. Ron Wyden (D-Ore.) mentioned in an announcement to KFF Health News. Wyden is among the sponsors of the laws.
The GAO inquiry, throughout which investigators tried to submit enrollments utilizing false data, was requested greater than a yr in the past by Republicans from three House committees: Energy and Commerce, Judiciary, and Ways and Means.
The lawmakers requested for findings that may very well be made public now, although the ultimate report and any suggestions it would include gained’t be accomplished till the spring or summer season of 2026. A hearing to consider the findings was set by House members for Dec. 10.
The report notes that federal officers estimate that $124 billion in tax subsidies had been paid in 2024 for almost 20 million ACA enrollments.
It highlighted some gorgeous findings. One Social Security quantity, as an example, was discovered to have been used for 125 insurance policies in 2023.
However, the variety of insurance policies flagged as doubtlessly compromised by rogue gross sales brokers was far smaller than the estimates of among the program’s greatest critics. The GAO recognized about 160,000 circumstances in 2024, or 1.5% of the ACA functions. Some conservative analysts have broadly estimated that unauthorized enrollments that yr numbered within the hundreds of thousands, a discovering that has drawn pushback from teams representing insurers, brokers, and hospitals.
The GAO report doesn’t quantify how a lot fraud there’s, Bagdoyan mentioned: “What it’s focusing on are indicators of potential fraud.”
CMS Anti-Fraud Efforts Fall Short
By October 2024, following shopper complaints, CMS suspended about 850 insurance brokers over questions on whether or not they had been concerned with unauthorized enrollment. All had been finally reinstated, CMS informed the GAO in May. Also final October, the GAO submitted the primary 4 of its faux functions, in search of protection for the ultimate months of the yr.
Just a few months earlier, in July 2024, CMS started requiring three-way calls with shoppers, {the marketplace}, and their brokers for sure kinds of adjustments, akin to plan switches. Unauthorized plan-switching nets rogue brokers a gross sales fee, and it may well additionally result in issues for shoppers, akin to dropping entry to their medical doctors or facing tax bills in the event that they had been improperly enrolled with subsidies, as KFF Health News reported in 2024.
However, the GAO reported that many brokers informed them these guidelines had loads of loopholes, such because the federal market taking solely “limited steps to verify the identity of the consumer on the three-way call,” as an example asking just for publicly obtainable data akin to a reputation and date of start.
Also, new ACA candidates had been exempt from the three-way name rule, which leaves open the potential of brokers saying it’s a brand new shopper when it isn’t.
“The three-way call is something CMS has promoted,” Bagdoyan mentioned. “It’s better than nothing, but as we point out in the report, it could be easy to overcome by an unscrupulous broker who starts the process from scratch. Or they could impersonate.”
Fine, the agent in Florida, mentioned he alone has filed dozens of complaints with federal and state officers, typically exhibiting purchasers’ information being accessed or modified by a number of brokers, typically on the identical day, even after the CMS guidelines on plan-switching went into impact.
In one such fraud grievance, Fine listed three market functions tied to at least one consumer’s title during which different brokers had modified his protection and included false revenue data. The consumer didn’t recall speaking with any of these different brokers, Fine wrote.
A market consultant who was serving to Fine restore that consumer’s protection informed Fine that he typically hears brokers pretending to be the buyer, typically even faking the voice of an opposite-sex individual.
Rogue brokers can faux it as a result of questions requested by market representatives to confirm identification “are from the application: the person’s name, date of birth, and address,” Fine mentioned. “That’s the ID proofing. It’s a joke.”
Asked in regards to the effectiveness of the three-way name rule and about reviews of impersonations, CMS spokesperson Catherine Howden mentioned in an announcement that “rooting out waste, fraud, and abuse is one of Dr. Oz’s top priorities,” referring to CMS Administrator Mehmet Oz. The company “takes allegations of fraudulent or abusive conduct seriously and acts swiftly when concerning behaviors are identified or reported,” she added.
Ronnell Nolan, the president and CEO of the insurance coverage dealer lobbying group Health Agents for America, mentioned: “Three-way calling is a bust. It needs to go away.”
Instead, she has lengthy referred to as for two-factor authentication, just like techniques utilized in banking and different industries, to make sure the individual making the change is definitely the policyholder or their agent.
That hasn’t occurred on the federal market, the place the issues with unauthorized switching are concentrated.
In the 20 states, along with the District of Columbia, that run their very own ACA marketplaces, such issues are not common. States say that’s as a result of they require extra kinds of authentication — they usually additionally usually use their very own web sites for sign-ups.
Bagdoyan mentioned the GAO report didn’t take into account what the states may be doing otherwise.
“That was beyond our scope,” he mentioned.
Devilish Details
The 26-page doc outlines the GAO’s probe, during which investigators filed 20 faux enrollments, some by means of insurance coverage brokers, spanning 2024 and 2025 protection. Most had been authorized, even with counterfeit paperwork.
One tried utility was dropped by investigators when the dealer stopped responding — the brokers didn’t know they had been a part of the investigation — and one other was rejected by the federal market after 5 months of protection when required paperwork weren’t submitted. But 18 of the plans stay in place and subsidies are being despatched to insurers to cowl the faux individuals, based on Bagdoyan.
The investigation additionally included an evaluation of enrollment information from 2023 and 2024 on the lookout for issues akin to a number of makes use of of the identical Social Security numbers, lifeless individuals’s numbers, and circumstances during which three or extra brokers submitted enrollment actions for a similar individual and begin date, doubtlessly indicating fraud.
Similar investigations utilizing the submitting of fictious enrollments had been carried out by the GAO in earlier undercover work that began in 2014, at first of the ACA.
The new report mentioned that whereas CMS assessed fraud dangers in 2018, it has not up to date its evaluation since then, at the same time as enrollment within the ACA has grown considerably.
“We have documentary evidence that whatever it is they did, obviously it hasn’t worked,” Bagdoyan mentioned, “because we encountered the same issues as 12 years ago, having to do with identity verification.”
