ACA Plans Are Being Switched Without Enrollees’ OK

By Julie Appleby
APRIL 2, 2024
Some consumers covered by Affordable Care Act insurance plans are being switched from one plan to another without their express permission, potentially leaving them unable to see their doctors or fill prescriptions. Some face large IRS bills for back taxes.
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.
“It’s rampant. It’s horrible,” said Ronnell Nolan, president of Health Agents for America, a nonprofit trade association representing independent insurance brokers.
The growing outcry from agents who have had their clients switched by rivals — which can steer monthly commissions to the new agent — casts a shadow on what otherwise has been a record year for ACA enrollment. More than 21 million people signed up for 2024 coverage.
Federal regulators are aware of the increase in unauthorized switching and say they have taken steps to combat it. It’s unclear, though, if these efforts will be enough.
On Feb. 26, the Centers for Medicare & Medicaid Services sent a “plan switch update” to industry representatives acknowledging “a large number” of 2024 cases and outlining some of its technical efforts to resolve problems when complaints are lodged.
“CMS is committed to protecting consumers in the marketplace,” said Jeff Wu, deputy director for policy for CMS’ Center for Consumer Information & Insurance Oversight, in a written statement to KFF Health News.
His office refused to provide details on how many complaints it has seen or the number of agents it has sanctioned but his statement said when action is taken, CMS reports it to state insurance departments, whose authority includes revoking licenses.
Wu did not answer specific questions about whether two-factor authentication or other safeguards would be added to the federal website, though he wrote that CMS is “actively considering further regulatory and technological solutions to some of these problems.”
In June, new rules kicked in that require brokers to get policyholders’ written or recorded verbal consent before making changes, although brokers said they are rarely asked for those documents.
Some unwitting enrollees, like Michael Debriae, a restaurant server who lives in Charlotte, North Carolina, not only end up in plans they didn’t choose but also bear a tax burden.
That happens when enrollees are signed up for coverage that includes premium tax credits paid by the government to insurers, even though the enrollee is ineligible, either because their income was misstated by the broker making the switch, or they had job-based insurance, like Debriae.
Unbeknownst to him, an agent in Florida with whom he had never spoken enrolled him in an ACA plan in March 2023. It was two months after he canceled his Obamacare coverage because he was able to get health insurance through his job. In June, he discovered he had a new ACA policy when his longtime pharmacy said it could not fill a 90-day prescription, which it had done with no problem in the past.
“That’s when I realized something horribly wrong had happened,” said Debriae.
Debriae got contact information for the Florida broker, but when he called, the office said…