CMS Cracks Down On ACA Brokers To Prevent Plan Switching

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Dive Brief:

• The Biden administration is making it harder for insurance agents and brokers to change people’s plans on the federal Affordable Care Act marketplace following mounting consumer complaints about unauthorized changes.
• On Friday, the CMS announced agents can’t make changes to a consumer’s enrollment in the federal exchanges unless they’re already associated with that consumer. If agents and brokers are unassociated, they have to take additional steps to update a consumer’s marketplace enrollment — even with that consumer’s consent, according to the notice.
• Unassociated brokers will have to have a three-way call with the beneficiary and the marketplace’s call center, or have the beneficiary change their enrollment themselves through HealthCare.gov or another approved portal. The changes, which don’t apply to the 18 states (and Washington, D.C.) that run their own insurance marketplaces, took effect immediately.

Dive Insight:

Third-party agents and brokers help people shop between ACA coverage and select a plan that best fits their needs. However, the intermediaries have come under increased criticism for switching people’s plans without their consent to gain commissions. That can leave consumers unable to access medical services and on the hook for additional out-of-pocket costs — or potentially steep back taxes, if they were signed up for subsidized coverage they’re not actually eligible for.

In the first half of this year, the CMS received almost 74,000 complaints from consumers that their plan was changed without their consent, and more than 134,000 complaints from consumers that they were enrolled in a plan without their consent, according to the notice. Regulators say they have resolved most of those cases.

The CMS has been increasingly forceful in cutting agents and brokers who perform unauthorized activity out of the exchanges.

Between late June and mid-July, regulators suspended 200 agents from the ACA marketplaces for suspicion of making unauthorized enrollments or plan switching.

“CMS will continue with robust oversight and monitoring of suspicious system activities by some agents and brokers and anticipates future suspensions of the Marketplace Agreements for additional agents and brokers who are suspected of unauthorized activity over the coming months,” the notice says.

Regulators also began a social media campaign to educate consumers about signs of marketplace fraud earlier this month.

Concerns about plan switching aren’t new, but have grown along with the ACA’s rolls. More than 21 million people signed up for ACA coverage during the most recent open enrollment period, a record high, according to the Biden administration.

The CMS has also moved to crack down on brokers nudging consumers to select privately run Medicare Advantage plans by placing a ceiling on the compensation paid to them by insurers. However, a judge paused the compensation cap earlier this month, saying regulators hadn’t properly substantiated the changes.