This month's glitch-filled rollout of the health-insurance marketplaces created by federal law is a business opportunity for brokers and agents, but regulators warn that it also opened the door for those who would seek to line their pockets by misleading consumers.
New Hampshire's insurance commissioner sent a cease-and-desist letter last week to an Arizona company he accused of building a website to mislead health-care shoppers into thinking it was the official marketplace. The site was taken down Friday.
Regulators in Washington state and Pennsylvania also have told agents to change websites that seemed likely to convince consumers they were connecting to government-run sites.
An organization run by the top insurance regulators in each state recently issued an alert on the potential for scams related to the marketplaces. The National Association of Insurance Commissioners advised consumers that bogus sites had been spotted and warned people to beware of unsolicited calls by people claiming they needed personal information to help them enroll in insurance.
Not all insurance agents are licensed to sell insurance on the exchanges, and buying a policy from one of them could leave consumers without the tax subsidies that make the health insurance affordable. Consumers who seek an insurance professional's help are urged to make sure they know who they're dealing with.
"We all need to be on the lookout right now. We don't want consumers to get confused," said Jessica Waltman of the National Association of Health Underwriters, a trade association representing agents and brokers.
In Pennsylvania, a consumer law group this summer tipped off regulators about a licensed broker's website that featured a logo mimicking the state seal and telling visitors: "Welcome to the Pennsylvania Health Exchange!" The broker took down PAhealthexchange.com a day after the state insurance department's enforcement bureau called.
While regulators have warned consumers, they don't have any reports of people being cheated. The National Association of Insurance Commissioners and state agencies in Pennsylvania, Virginia, and North Carolina report no complaints since the marketplaces launched Oct. 1.
Those with industry experience warn that, whenever there's money and confusion, consumers should be alert. Fraudsters saw opportunities when Medicaid Part D prescription drug insurance plans hit the market a decade ago, said Waltman, of the agents and brokers trade association.
The first line of defense is checking whether a broker or agent is licensed by the state insurance department where they operate. Usually that can be done online.
The federal Centers for Medicare & Medicaid Services doesn't have such an option to check whether an agent has completed training necessary to work for consumers on a federally run exchange. The agency recommends that consumers ask agents to provide a copy of the certificate showing they've completed training.
"The law is complicated, and making any sort of insurance purchase can be complicated - which plan to choose, deductibles, co-insurance, co-pays, network of providers," said John Adair, a broker in Greer, S.C., who built a website and licensed his business in states nationwide to capture new customers.
"With what we're seeing with the federal exchange, and some of the glitches," he said, "the agents themselves are very much in high demand."
Tips on Avoiding Insurance Scams
Tips to avoid fraud in the Affordable Care Act's health insurance marketplace:
Don't trust a website that asks you to enter personal data such as a Social Security number, bank account number, or credit card information, other than the federal exchange website, www.healthcare.gov.
The services of navigators or certified application counselors are free, but they can't sell you a policy or recommend a specific insurance plan to buy.
If you have Medicare, it's against the law for someone to sell you a plan on the insurance marketplace.
No one should ask for your personal health information.
Don't give your Social Security number or credit card or banking information to companies you didn't contact or to unsolicited advertisements.
Never give your personal information to someone who calls or comes to your home without your request, even if they say they are from a marketplace.
Don't sign anything you don't fully understand.
It's not true that insurance premiums are good only for a limited time. Enrollment in the exchanges will be open through mid-March and rates for plans approved for sale there stay in place until then.
If someone tells you that you could go to jail for not having health insurance, don't believe it. Beginning next year, all Americans will be required to have health insurance or face a penalty of $95 for each adult or 1 percent of family income, whichever is greater.
Something that sounds too good to be true probably is.
Consumers who suspect fraud can lodge a complaint with the Marketplace Call Center (1-800-318-2596), which will be entered into a Federal Trade Commission database used by federal and state law enforcement agencies to track potential fraud activity. Federal officials will be able to monitor complaint activity for trends within and across all 50 states.
- Associated Press
SOURCES: U.S. Centers for Medicare & Medicaid Services, Pennsylvania Insurance Department, North Carolina Insurance Department.
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