NAIC takes aim at improper health insurance marketing

Marketing of Medicare Advantage plans and Affordable Care Act marketplace plans is a priority for the National Association of Insurance Commissioners Improper Marketing of Health Insurance (D) Working Group. The group aired its concerns about consumers who say their ACA plans were switched without their consent as well as its concerns about deceptive MA marketing during the NAIC Spring Meeting.

Martin Swanson of Nebraska, chairman of the working group, said he has heard reports from other states of certain agents having their ACA clients taken away from them unbeknownst to the client and enrolled in a different health insurance plan.

Gina Zdanowicz, deputy director, marketplace plan management group, with CMS told the panel CMS is undertaking an initiative to stop misleading agent activities known as “agent transfers,” where agents have switched ACA plans on clients or taken clients away from other agents.

CMS expanding its requests that brokers provide evidence that they obtained the consumer’s consent before changing their health plan, she added.

Joylynn Fix of the West Virginia Department of Insurance said that agent transfers are occurring among Medicaid-eligible consumers in her state.

“They go to healthcare.gov and find that they’re eligible for Medicaid. Then these bad actor agents are picking them up and enrolling them in a marketplace plan. They don't understand what's happening until they go to access care,” she said.

Bryan Stevens of Wyoming said he believes one of the biggest catalysts for agent transfers is what he called “an infinite special enrollment period for low-income people under the American Rescue Plan.”

“Low-income consumers are being targeted the most by these deceptive marketing practices,” he said.

Medicare Advantage and third-party marketing organizations

States need the authority to regulate Medicare Advantage marketing and to act swiftly against agents and others who break the law, Stevens said.

“I see third-party marketing organizations’ ads all the time, enticing agents to sell Medicare Advantage by telling them how much money they can make,” he said. “As long as that continues to exist, and it's much more than they'll ever make selling a Medigap policy, we're going to have this problem.”

Mike Taylor, a division director with the CMS Drug Health Plan Operations Team, told the panel there has been a slight decrease in the number of marketing representation complaints CMS has received compared with this time last year.

“We’re hopeful that the level of oversight we’ve been applying over the past six months to a year has made a dent into that,” he said.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on X @INNsusan.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].