CMS Statement on Agent and Broker Marketplace Activity, Update

About a month ago, KFF reporter Julie Appleby wrote a stunner of a report about rogue agents switching ACA exchange enrollees to different policies without their knowledge or permission.

In response, a couple of weeks later the Centers for Medicare & Medicaid Services (CMS) issued a statement about the actions they're taking to resolve the issue.

Today they issued an update on that:

CMS remains committed to protecting consumers in the Marketplaces to ensure they are enrolled in the plan of their choosing and to terminate brokers who defraud consumers. We are taking stronger actions given very concerning activity by some agents and brokers related to unauthorized plan switches and unauthorized enrollments—where a consumer was switched from their selected plan into a new one or signed up for coverage without their knowledge or consent. CMS continues to improve its processes to resolve unauthorized plan switches and unauthorized enrollments performed by agents and brokers in the Marketplaces that use the platform. 

A record-high 16.4 million people selected plans for coverage through the Marketplaces that use during the most recent open enrollment period. CMS received approximately 40,000 complaints of unauthorized plan switches in the first three months of 2024. Approximately 39,000, or more than 97%, of these complaints have been resolved. Complaints are resolved through a combination of the following:

  • CMS reviews the complaint to verify that the consumer’s plan switch was unauthorized and identifies the plan that the consumer wants to be enrolled in.
  • CMS instructs the issuer offering the plan the consumer wants to be enrolled in to reinstate the consumer’s enrollment in that plan as if it had not been terminated. The insurer is instructed to cover all eligible claims incurred and accumulate all cost sharing toward applicable deductibles and annual limits on cost sharing.
  • Consumers and the Internal Revenue Service (IRS) receive updated tax forms and information to prevent adverse tax implications as a result of the unauthorized plan switch activity. 

CMS continues to resolve the approximately 1,000 unresolved cases. The overall turnaround time to resolve an unauthorized plan switch case from January to March was about 20 calendar days. CMS has accelerated the review of complaints and is currently resolving cases in fewer than 11 calendar days.

OK, good, but what about people who didn't even know they were being enrolled into any plan in the first place?

CMS also received approximately 50,000 complaints of unauthorized enrollments in the first three months of 2024. Approximately 44,000 of these cases, or 88%, have been resolved, meaning the consumer’s unauthorized enrollment is canceled, any claims-related costs incurred because of the unauthorized enrollment are reimbursed, and CMS sent the consumer and IRS updated tax forms and information. About 6,500 unauthorized enrollment cases are still pending resolution. The overall resolution time for an unauthorized enrollment case from January to March was approximately 27 calendar days. CMS is working diligently to shorten the resolution time for these complaints.

CMS will accelerate review and resolution for all new complaints related to unauthorized plan switches and enrollments. 

OK, fine, but what are they doing to stop this from happening in the first place going forward?

In addition to providing timely consumer assistance, CMS is focused on stopping bad actors in the Marketplaces. The agency is accelerating monitoring and oversight activities with respect to agents and brokers and continues to work with our state and insurer partners. Specifically, CMS is ramping up its review of alleged fraudulent or abusive conduct and issuing suspensions and terminations of these agents’ and brokers’ Marketplace agreements with HHS when appropriate, barring them from being able to enroll consumers in coverage and insurance affordability programs.

That's good...what about adding security features like 2-factor authentication, etc. to the enrollment/transfer process as well?

CMS will also add new technological protections to prevent such unauthorized activities from occurring. Finally, CMS is considering imposing civil monetary penalties on agents and brokers who commit fraudulent or abusive conduct.

Um...considering? Why the hell are they just considering doing so? Shouldn't penalties be in place already? For that matter, shouldn't criminal charges be brought in some cases?

Consumers who believe they may have been the victim of an unauthorized agent or broker activity associated with their Marketplace enrollment should call the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) for prompt resolution of any coverage issues.