Unauthorized Plan Switching and Enrollment in ACA Health PlansJoanna Kipnes, MD, MS, FHM Plan swapping, plan-switching, or unauthorized enrollment has grown as a serious challenge facing the Affordable Care Act (ACA) with lawmakers taking note. Brokers, armed with only a person’s name, date of birth, and state can access a policyholder’s coverage through the federal exchange and enroll a consumer in a plan without their knowledge. When this occurs the consumer’s preferred policy is cancelled or terminated, being replaced by a different plan. Often consumers are not even aware of the switch until they see a doctor or fill a prescription and are faced with adverse determinations. Under the Biden administration, record enrollment levels were reached after increasing premium subsidies for many lower-income people resulting in reducing the monthly cost of some plans to $0. A monthly special enrollment period was also added for low-income consumers. These two initiatives created an opportunity for fraud whereby patients, who don’t pay any monthly premium, were wholly unaware of a change in their plan and there were more consumers enrolling throughout the year, masking broker fraud. The majority of cases of unauthorized enrollment prior to 2024 occurred to consumers with existing ACA coverage or to consumers who were ACA eligible but never elected coverage. In addition, most of the hot-spots for plan swapping occur in states that use the federal exchange as opposed to a state based exchange (California, Colorado, Connecticut, District of Columbia, Georgia, Idaho, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Vermont, Virginia, Washington). In addition to being swapped into a plan that was not selected, resulting in higher out-of-pocket costs, consumers can face unexpected tax bills if they get enrolled in a subsidized plan that they were not eligible for. Despite the increasing recognition around unauthorized enrollments, one unexpected situation began occurring where Medicaid patients were fraudulently enrolled in low or zero premium ACA plans, thus causing them to be disenrolled from their Medicaid plans. Sometimes this swap was happening completely without the knowledge or consent of the patient. Sometimes it occurred when an agent offered cash, gifts, or other perks for signing up for an ACA plan. Agents sometimes mislead people by saying that these insurance plans will not cost anything but unsuspecting patients do not realize that enrolling in an ACA plan will often disenroll them from Medicaid or push their Medicaid to a secondary insurance. This swap was only recognized by patients, hospitals, and providers after the patient was unable to pay for care or prescriptions. The ACA marketplace should not, theoretically, be able to enroll a consumer who already is enrolled with a governmental payer. In the first six months of 2024, the Centers for Medicare and Medicaid Services (CMS) received over 200,000 complaints from consumers who had enrolled in one ACA plan and been swapped to a different plan without their consent. In June 2024, in an attempt to stem the growing number of unauthorized enrollments, CMS adopted new requirements in the 2024 Payment Notice1 that applied to brokers and agents who assist with or facilitate enrollment in Marketplace coverage. These rules included a requirement for brokers to obtain policyholders’ written or recorded verbal consent before making changes. CMS also blocked insurance agents from making changes to any ACA enrollments through the federal marketplace unless the agent is already “associated” with a consumer’s policy, preventing new, rogue agents from accessing a consumer’s policy. While these new rules did have some mitigating effect, cases of plan-swapping were still being widely reported across the country. In November 2024, the Biden administration started requiring three-way calls among insurance brokers, clients, and the federal insurance marketplace when certain coverage changes were made. On March 10, the Trump administration issued a proposed rule intended to decrease fraud in the program and promote Trump administrative policy priorities.2 In this rule, CMS proposes to shorten the open enrollment period to six weeks, end the monthly special enrollment period for low-income households, improve the transparency of agent and broker compliance, change the methodology by which cost sharing annual limitations are calculated which will result in higher limits, and require pre-enrollment eligibility verification for new enrollees who are signing up under the remaining special enrollment periods that allow people to sign up after major life events. The new proposed rule, in addition to decreasing fraud associated with the marketplace, also includes other Trump administrative priorities, such as eliminating eligibility for Deferred Action for Childhood Arrivals (DACA) recipients who would no longer be able to enroll in marketplace plans or receive cost-sharing reductions or premium tax credits and eliminating any gender-affirming care as an essential health benefit beginning in 2026. CMS estimates that between 750,000 and 2 million consumers would lose marketplace coverage in 2026 as a result of the policies proposed in this rule. Some of that loss would be due to closing the loopholes that allow unauthorized enrollments and part would be due to the increased administrative burden of the new requirements. Physician advisors should be aware of the existence of plan swapping on the healthcare exchange. While regulations are closing the loopholes and decreasing the scope of this problem, the problem still exists. Physicians and other staff should be specifically tuned into patients who had Medicaid plans but now find themselves enrolled in an ACA plan. When this situation occurs, patients will often have more out of pocket expenses for medications, doctors’ visits, and treatments that they did prior. When that situation is identified, patients should be directed to disenroll from the ACA plan and re-enroll in their Medicaid. Patients with ACA plans that they did not enroll with can file a complaint with CMS at the Marketplace Call Center (1-800-318-2596) They can assist in cancelling or changing an ACA plan. Patients can learn more by viewing the CMS flyer at CMS.gov/files/document/agent-broker-infographic-2024-final.pdf.
Dr. Joanna Kipnes is Associate Professor, Hospital Medicine, Department of Medicine, Associate Chief Medical Officer, Patient Revenue Management Organization, and Medical Director of Utilization Management for Duke University Health System. |