Wyden, Senators Propose Criminal Penalties, Consumer Protections to Stop Rogue Health Insurance Brokers
Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., and five senators today introduced a bill to apply criminal penalties to rogue insurance brokers who are changing Americans’ Affordable Care Act (ACA) marketplace plans without their knowledge or consent, and take other steps to strengthen consumer health insurance protections.
“Predatory health insurance brokers are stealing money out of families’ pockets by leaving them with uncovered medical expenses, unexpected tax liabilities and more by fraudulently changing or enrolling Americans in health insurance plans in the federal marketplace,” Wyden said. “It is critical for these bad actors to be held criminally responsible and implement common sense consumer protections so working families can confidently purchase quality, affordable health insurance that works for them through honest brokers. My bill will crack down on fraudulent tactics that cheat hard working Americans out of getting the health care they need. The solution to fraud is to go after fraudsters, not to take away middle class tax credits for health care.”
The bill, titled the Insurance Fraud Accountability Act, would hold fraudulent insurance brokers and marketers criminally responsible for profiting off of 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. Also, brokers 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.
Wyden has worked hard to protect Americans from fraudulent and deceptive practices related to health insurance. In May, Wyden urged the Centers for Medicare & Medicaid Services (CMS) to protect affordable, secure healthcare and impose penalties for healthcare fraud by brokers. CMS replied to that letter last week. In February 2023, Wyden called on CMS to finalize additional protections for Medicare Advantage customers against deceptive marketing. In November 2022, Wyden investigated numerous tactics used by insurance companies, brokers, and third parties to deceive seniors into signing up for their plans, and provided CMS with recommendations to combat these schemes.
The bill is cosponsored by Senators Sherrod Brown, D-Ohio, Tammy Duckworth, D-Ill., Patty Murray, D-Wash., Brian Schatz, D-Hawai’i, and Chris Van Hollen, D-Md.
The bill is endorsed by AHIP, American Cancer Society Cancer Action Network, American Kidney Fund, American Lung Association, Arthritis Foundation, Blue Cross Blue Shield Association, Cambia Health Solutions (Regence BCBS), CancerCare, Centene Corporation (Ambetter), Child Neurology Foundation, Chronic Disease Coalition, Crohn's & Colitis Foundation, eHealth, Epilepsy Foundation, Families USA, Hemophilia Fed of America, Immune Deficiency Foundation, Lupus Foundation of America, Muscular Dystrophy Association, National Alliance on Mental Illness (NAMI), National Health Council, National Multiple Sclerosis Society, National Patient Advocate Foundation, QuoteVelocity, Susan G. Komen, The AIDS Institute, The Leukemia & Lymphoma Society, The Mended Hearts, Inc., UnidosUS, and WomenHeart: The National Coalition for Women with Heart Disease.
The one-pager is available here. A summary of the bill is available here. The bill text is available here.
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