Federal regulators should use their statutory authority to fine rogue brokers and agents who sign people up for exchange plans without their knowledge, Sen. Ron Wyden (D-Ore.) wrote to Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure.
Wyden, chair of the powerful Senate Finance Committee, said in a statement Monday that he plans to introduce legislation that allows federal regulators to hold sellers criminally responsible for improper exchange plan sign-ups and switches. The Affordable Care Act already gives CMS the authority to fine misleading marketers up to $250,000, but the agency has not used that authority. Wyden is also investigating Medicare Advantage sellers’ business practices.
Related: What CMS has done about misleading exchange marketing
“I write to express my outrage with reports that agents and brokers are submitting plan changes and enrollments in the federal marketplace without the consent of the people who rely on these plans,” Wyden said. “These plan changes and enrollments result in tangible harm to people, including uncovered medical expenses, loss of coverage and disruptions in care, and an unexpected tax liability that could be thousands of dollars out of their own pockets.”
CMS did not immediately respond to an interview request.
In a statement this month, CMS said it was considering issuing civil monetary penalties for unscrupulous agents and brokers in response to a rise in reports of people being enrolled in unauthorized policies. During the first three months of the year, CMS said it received approximately 40,000 complaints from people who had unknowingly been switched to new exchange plan policies, and an additional 50,000 complaints of unauthorized enrollments during the annual sign-up period for 2024. Regulators said they have worked to resolve almost all of these complaints and canceled members’ enrollment, reimbursed them for claims costs incurred and sent consumers’ updated financial information to the Internal Revenue Service.
Additionally, CMS said it barred some agents and brokers from selling exchange policies. The agency “will also add new technological protections to prevent such unauthorized activities from occurring,” although regulators did not specify what actions they would take. The update builds on a separate “plan switch update” notice CMS issued in February.
Exchange enrollment hit an all-time high of 21.3 million during open enrollment for 2024.
CMS in recent years has worked to crack down on bad actors in the insurance sector by enhancing marketers' federal reporting and consumer disclosure requirements.
