On unauthorized plan-switching in the ACA marketplace

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How did this get in my pocket?

Julie Appleby of Kaiser Health News reported last week that health insurance brokers are switching a number of ACA marketplace enrollees in HealthCare.gov states from one plan to another “without their express permission” and often without their knowledge.

Unauthorized enrollment or plan-switching is emerging as a serious challenge for the ACA, also known as Obamacare. Brokers say the ease with which rogue agents can get into policyholder accounts in the 32 states served by the federal marketplace plays a major role in the problem, according to an investigation by KFF Health News.

Indeed, armed with only 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. It’s harder to do through state ACA markets, because they often require additional information.

The story is well-sourced and illustrated, with individuals recounting that they suddenly were unable to use the plans they thought they were enrolled in. In one case, a victim found himself on the hook for months of tax credits after disenrolling because he’d obtained employer-sponsored insurance and then being re-enrolled in another plan by a broker unknown to him. Appleby also cites brokers who claim that hundreds of their clients were poached and re-enrolled in plans other than the ones they’d chosen. Appleby links to key CMS documents, online ads, and insurer advisories.

I spoke to brokers and web brokers to delve further into how the fraud works, how the harms are redressed, and how it might be prevented. A few takeaways below.

ACA enrollment: driving uphill in a snowstorm.

As George W. Bush's second-term HHS Secretary, Michael Leavitt knows something about rocky rollouts of new government health programs, having overseen the launch of the Medicare Part D prescription drug coverage program, now broadly regarded as a success (e.g., by Leavitt).  As chair of health consultancy Leavitt Partners, he's also contracted with several state governments to help set up their ACA exchanges -- a role that subjected him to fierce conservative fire when he was named head of  Mitt Romney's transition team.  In 2011, he urged Republican governors to be practical and take control of their own state exchanges rather than cede the effort to the federal government. Notwithstanding his many qualms about the Affordable Care Act (e.g., its funding mechanisms), he is a believer both in state exchanges and in extending coverage to uninsured Americans.

It is not surprising, then, that in a January interview with Julie Appleby of Kaiser Health News, Leavitt signaled considerable empathy for the besieged team trying to get the ACA launched. Asked about one of the administration's many adjustments to rules and deadlines -- the extension of catastrophic plan eligibility to those whose 2013 plans were canceled -- he offered a striking metaphor that captures the administration's mindset and m.o.:

They’re trying to find ways to keep enough momentum moving forward.  Think about it like a big snowstorm, and you’re trying to drive a car uphill. The most important thing is to keep momentum and keep it out of the ditch. You might swerve from side to side, or might even do a circle or two. But if you can keep the momentum going up the hill, then you can ultimately succeed. They’re driving on a slick road up a stormy hill. They will do some things they hadn’t anticipated. But forward momentum is their game. At the end of the day, we’ll find out. They may get there; they may end up in a ditch. They may have a collision. Who knows? 

Bypassing HealthCare.gov, cont

In prior posts, most recently here, I have explored the possibility that shoppers for health insurance on the ACA exchanges might bypass the still-balky HealthCare.gov with the help of information-only comparison sites ValuePenguin and HealthSherpa. Customers ineligible for a federal subsidy can already easily get all the information they need on these sites and then enroll directly with an insurer. For those whose incomes entitle them to subsidies, however, the subsidy application has been the roadblock, as it must be submitted directly to the federal government, either through HealthCare.gov or via phone or print application.

That may be about to change. Kaiser Health News' Julie Appleby reports, "Insurers and the Obama administration are testing fixes to healthcare.gov designed to allow insurers and web-based brokers to directly enroll consumers who qualify for subsidies under the health law."  It appears, though that the fixes require insurers themselves to route the customer's application through HealthCare.gov -- that is, in the 36 states that have forced the federal government to run their exchanges.  Direct insurer processing of the subsidy application is still only an ask: