ACA Health Insurance: The Growing Issue of Unauthorized Plan Switching

The Affordable Care Act (ACA), also known as Obamacare, has seen a range of new changes introduced to healthcare insurance across the US.

And while most of these changes have been positive, a new concerning trend has emerged: unauthorized plan switching. 

KFF Health News reports that this switching is happening with surprising ease in the 32 states that serve the Federal Marketplace. Customers find themselves enrolled in new plans without their knowledge or consent.

The result?

• Profound implications for their financial well-being and; 

• Not being enrolled in the right plan to meet their healthcare needs.  

While the issue appears more common in states like Florida, Georgia, and Texas; North Carolina isn’t immune. 

Let’s explore the scope of the problem and what you can do to stay safe. 

Unauthorized Plan Switching

The issue is stemming from rogue insurance agents. 

Because it’s easy for agents to access policyholders' accounts in the Federal Marketplace, these agents use minimal personal information (name, date of birth, and state) to not only access accounts but also make unauthorized changes. 

Why? To give these agents better financial outcomes, like a monthly commission from more lucrative plans.

According to KFF Health News, one worker in a government office personally handled more than 1,200 complaints relating to unauthorized switches or enrollments in the last three months alone; highlighting how widespread the issue has become.

The Impact to Policyholders

Unfortunately, often, customers don’t even know about changes to their insurance plan until it’s too late.

Michael Debriae, a restaurant server from Charlotte, was impacted by unauthorized plan switching. The result didn’t just mean unexpected changes to his coverage—it also left him with a big IRS tax bill. 

Without his knowledge, a Florida agent he had never spoken to enrolled him in an ACA plan two months after he canceled his coverage because he arranged insurance through his employer. He only discovered the issue when he couldn’t fill a prescription that he’d previously had no issues filling.

Worse, because Mr Debriae had job-based insurance, he wasn’t eligible for the premium tax credits from the plan—so he’s left to foot the bill.

How is it Happening?

There is speculation that names and lists of potential insurance clients are being sent to rogue agents—those willing to bend the rules. 

These agents will then use the list data to switch plans - earning a monthly commission in the process. 

Brokers can get a monthly commission of roughly $20 to $25 per enrollee.

Besides unauthorized switching, we’re also seeing an increasing number of misleading advertising tactics that contribute to the problem. These ads (often online, particularly social media) lure people into providing their information, which the agent uses to change their plans without their knowledge. 

These vague advertisements also typically promise ‘subsidies’, without explaining what those subsidies are. They’re purposefully misleading individuals, resulting in plan changes that aren’t in the customer's best interest. 

Usually, the ‘subsidies’ advertised are premium tax credits that people who enroll in ACA plans are eligible for based on their income. These ads portray these subsidies as money going into your pocket when, in reality, the money goes to the insurers to offset the price of the new insurance plan.

Regulatory Response and Safeguarding Consumer Rights

Federal regulators are aware of the issue and are taking some steps to address it, but the problem remains. 

For now, they’ve introduced initiatives like requiring brokers to get explicit consent before making any changes to customer plans. But the complexity of our healthcare system and the number of rogue agents continues to be an issue.

Unlike the Federal Marketplace, states that have their own marketplaces have introduced stricter authentication that is making it more difficult for unauthorized switching to occur. For example, two-factor authentication and customer-controlled access to broker accounts have both proven effective to help mitigate the risks.

While the ease of access to policyholder accounts on the Federal Marketplace is great for encouraging enrollment, introducing tighter controls may negatively impact those numbers. But there needs to be a balance between protection and ease that helps clamp down on switching plans without consent.  

Industry Response and Ongoing Efforts

Some insurance providers are taking steps to help address the issue by introducing policy locks. They’re also warning brokers and insurance agents against engaging in any misleading practices. But it’s generating mixed responses. 

At Health Plans of NC, we’re strong advocates for ongoing vigilance to help eradicate this issue, and believe it’s up to agents, brokers and insurers to work together to help protect customers.  When fraud occurs, we report it to the appropriate authorities and work with our clients to remedy any problems that may have occurred under the incorrect policy.

What You Can Do to Stay Protected

The level of unauthorized plan switching poses a threat to the integrity of the ACA - and even more importantly, the well-being of everyday North Carolinians as enrollees.

As the insurance industry works to help address this challenge, we’re encouraging our customers and anyone worried about having their details compromised to remain alert. 

Here are some things we recommend to ensure that you have continued access to the healthcare coverage you need and deserve.

1. Stay Vigilant

Keep updated about the latest developments in healthcare insurance regulations and practices. Review your policy details regularly and be on the lookout for any unexpected changes. Ensure you read through any communications or notifications about your coverage - particularly if it comes from an unfamiliar source. Did you get a new insurance card in the mail when you already had one? Did you get an eligibility letter from The Health Insurance Marketplace outside of Open Enrollment? These are signs that a change to your application has been made.

2. Verify Changes with Your Agent

We recommend contacting your insurance agent or broker before you make any changes to your insurance plan. They can help you verify the details to make sure everything is legitimate. Ask why any alterations they recommend align with your preferences and healthcare needs. Make sure you ask for the request to be in writing or record the confirmation of any changes made to your policy.  Our Health Plans of NC agents provide consent forms and a chance to review your subsidy application and plan choice before enrollment.

3. Secure Your Personal Information

Although challenging, be vigilant about your personal information and data. Doing so can help to protect your details, like your name, date of birth, and social security number, from unauthorized access. This includes being cautious about sharing personal information over the phone or online. Especially if you’re getting unsolicited communications when you’re not 100% sure who you’re talking to. Make sure you only give out your information to reputable and verified sources. 

4. Choose Two-Factor Authentication

Always use two-factor authentication (or other available additional security measures) to help protect your online accounts when they are available. Two-factor authentication means two separate forms of ID or authentication are needed to verify your account. For example, your email and your phone number. This additional security protection can help ensure only you can access your account and helps reduce fraudulent activity.

5. Report Any Suspicious Activity - Fast

Report it immediately if you suspect unauthorized plan switching relating to your healthcare coverage. 

Contact your insurance provider, the North Carolina Department of Insurance, or the Federal Health Insurance Marketplace. You can then file a formal complaint and get help quickly to resolve the issue. 

Need Help?

We’re incredibly disappointed to hear about these unauthorized changes in the industry, particularly given that the issue appears to be stemming from licensed, rogue agents outside of North Carolina. 

At Health Plans of NC, we’re committed solely to achieving the best outcomes for our customers. We’ll listen to your needs and find a plan that fits those needs - and that’s within your budget.

If you live in North Carolina and want to speak to one of our knowledgeable and helpful local health insurance agents, contact us today. We can work with you to understand your needs and help you find the right plan.