Wyden, Ross, Castor and Colleagues Propose Criminal Penalties to Fight Fraud, Stop Rogue Insurance Brokers
Bicameral Legislation Fights Fraud by Going After Fraudsters, Not Cutting Tax Credits for Health Insurance
Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., Representatives Deborah Ross, D-N.C., and Kathy Castor, D-Fl., along with nine senators, today introduced legislation to create criminal penalties for health insurance brokers that violate the law by changing Americans’ Affordable Care Act (ACA) marketplace plans without their knowledge or consent.
“The best way to fight fraud is to go after fraudsters, not punish Americans trying to get affordable health care,” Wyden said. “Working families need to be able to confidently purchase quality, affordable health insurance through honest brokers. Bad actors who are undermining that confidence must be held criminally responsible. Republicans have been talking a lot about waste, fraud, and abuse lately - this legislation is a great place to start rather than taking away health insurance from working Americans and increasing premiums for millions of families.”
“North Carolina families should never have to wake up to find their health insurance changed or cancelled without their knowledge,” Ross said. “I am proud to reintroduce necessary legislation that protects our communities from deceptive practices, holds bad actors responsible, and ensures every North Carolinian can trust that their health care decisions remain in their hands. While Republicans attempt to slash Americans’ health care, we are introducing a bill that would address tangible problems in our country’s health care system.”
"The Affordable Care Act (ACA) has been a godsend to families across America and in Florida, which has the highest number of marketplace enrollees nationwide. The ACA has lowered the cost of high quality health care and banned discrimination for preexisting conditions. Unfortunately, a few bad actors are exploiting people and signing them up for health insurance plans without their consent,” Castor said. "I’m proud to introduce the Insurance Fraud Accountability Act with Senator Wyden and Rep. Ross to bring greater transparency and accountability to the health insurance marketplace by cracking down on predatory health insurance sales, ensuring consumers are notified of plan changes, establishing stronger penalties for fraudulent enrollments and requiring brokers to act in the best interest of the customer. Together, these measures will protect hardworking Americans from predatory practices and keep money in their wallets where it rightfully belongs. If President Trump and Congressional Republicans were serious about addressing fraud in our health systems, they would support this critical legislation.”
The bill, titled the Insurance Fraud Accountability Act, would hold fraudulent insurance brokers and marketers criminally responsible for profiting off deceptive marketing schemes into health care insurance plans. Rogue brokers use misleading advertising, such as touting free government subsidies, to target low-income individuals and enroll them into insurance plans without their permission. Brokers often switch customers’ insurance plans without ever contacting them. These changes leave customers with uncovered medical expenses, loss of coverage, disruptions in care, and even tax liabilities that could be up to thousands of dollars from their own pockets.
The bill creates new civil penalties for agents and brokers submitting incorrect information due to negligence and knowingly submitting false or fraudulent information, and criminally responsible for knowingly and willfully providing false or fraudulent information. It also creates a consent verification process for new enrollments and coverage changes, which would include notifying individuals when there has been a change in their enrollment or agent of record, and takes additional steps to bolster consumer protections and transparency.
While congressional Republicans are using allegations of fraud in the Affordable Care Act as a pretense for not extending the enhanced premium tax credits, this legislation takes meaningful steps to crack down on real, documented fraud. American families don’t want to see a spike in their health insurance premiums - they want Congress to attack health care fraud.
The bill comes as the Centers for Medicare & Medicaid Services (CMS) has already begun undermining the ACA marketplaces by shortening the enrollment period, taking away financial assistance that lowers premiums, reducing benefits, and more.
A one-page summary of the bill is here. The legislative text of the Senate bill is here.
Senate cosponsors include Senators Tammy Duckworth, D-Ill., Mazie Hirono, D-Hawai’i, Amy Klobuchar, D-Minn., Patty Murray, D-Wash., Brian Schatz, D-Hawai’i, Jeanne Shaheen, D-N.H., Tina Smith, D-Minn., Chris Van Hollen, D-Md., and Peter Welch, D-Vt.
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