Tiesha Foreman said every trip to the doctor has become difficult because she never knows if her health insurance will be there when she goes to settle up.
“It’s stressful and scary and it’s embarrassing because you have them looking back at you like, ‘Why? Why are you giving us this card saying that you’re covered and you’re not again?’” Foreman told Action News Jax investigators.
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The Georgia mother said for months now, when she goes to pay her health insurance premium, it gets returned. The family had to pay for an MRI out of pocket and even thought an emergency surgery might not be covered.
“One minute I have insurance, we go to a doctor. And then a few weeks later, I’m getting my premium back, and we don’t have insurance,” Foreman said.
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In January, Foreman got a tax form in the mail that amounted to a $1,700 tax bill for overpayment of federal health insurance subsidies.
It was for an extra health insurance policy Foreman said she never knew about.
She said an insurance broker she never met signed her up for a policy she never asked for.
“For three months, I kept trying to call on the phone, trying to talk to the marketplace to get them to understand I wasn’t doing these applications. I didn’t know who this agent was,” Foreman said.
An Ohio family discovered they had a problem when they went to the pharmacy to pick up insulin for Randy Delaney’s diabetes.
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“You can imagine my shock when they told us it was $1,096,” his wife Lorie said.
After months of frustrating calls, the Delaneys found their health plan had also been switched multiple times without their consent. They now worry they’ll be on the hook for a giant tax bill in January.
A proposed class action lawsuit alleges that some families who rely on the Affordable Care Act marketplace for health insurance are victims of a multimillion-dollar health care fraud scheme.
“I believe this is the largest health insurance fraud case ever,” Atlanta Attorney Jason Doss, who filed the lawsuit on behalf of families across the country, said.
He said rogue insurance agents are exploiting a provision added during the COVID-19 pandemic that allows low-income Americans to switch coverage on the marketplace at any time, not just open enrollment.
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“The problem is, what if the bad guy owns the enrollment platform? They have the keys to the castle,” Doss said.
Insurance agents get paid a monthly commission of about $20 per ACA policy. If they switch a customer’s policy, they make money.
Georgia insurance agent Callie Navrides said she has repeatedly had customers of hers switched by other agents without the customer’s knowledge or approval.
“All they need is a first name, last name, date of birth, and state,” Navrides said.
Navrides estimates that at one point, she had lost 40% of her clients to rogue agents.
Each switch means potential gaps in coverage.
“They think they’re covered until they go to the pharmacy to go get medicine. And then the pharmacist tells them your health insurance was canceled,” Navrides said.
The lawsuit alleges that one of the ways the agents are getting information is through social media ads promising cash cards containing “free money.”
Foreman’s husband clicked on one of those ads and ended up talking to someone at a company called TrueCoverage – who later switched the family’s health plan.
“They just asked him his name and where he lived. He had no idea that this was happening,” Foreman said.
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The federal government’s own numbers show the massive scale of this.
Nearly 275,000 people in the first eight months of the year have filed complaints saying they were either changed from or enrolled in plans without their consent.
“It’s just like somebody is in there just messing with your life every day,” Lorie Delaney said.
The system was designed to give private companies access to the federal marketplace database.
But citing “anomalous activity” the Center for Medicare & Medicaid Services blocked two companies, Benefit Align and TrueCoverage, from the marketplace in August.
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A whistleblower from TrueCoverage who once worked as an insurance agent there agreed to speak to us if we hid his identity.
“I don’t like the word guilt, but I felt ashamed, and I felt embarrassed,” he said.
In an affidavit as part of the lawsuit, a different whistleblower provided an internal TrueCoverage email from the senior director of quality assurance, directing agents to be “vague” about cash cards during phone calls.
The email said they “cannot give specifics” about cash “despite what ads are promoting.”
“The top performers were people that were lying bluntly, and they were telling people that they were going to get that cash,” the whistleblower continued.
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But there is no free money. The federal subsidy for insurance actually goes to the insurance company, not the consumer.
Even worse, if your income doesn’t qualify for those health plans, you will have to pay the subsidies back at tax time.
“What you get at the end of the year is a penalty from the IRS,” Navrides said.
CMS has taken steps in recent months to address the problems.
In a statement, CMS tells Action News Jax, “From June 2024 through October 2024, CMS suspended 850 agents’ and brokers’ Marketplace agreements for reasonable suspicion of fraudulent or abusive conduct related to unauthorized enrollments or unauthorized plan switches.”
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CMS said new security steps include blocking agents and brokers from making changes unless they are already associated with the consumer’s account and requiring new agents to have a three-way call with the marketplace and the consumer before allowing them to switch a plan.
Just within the past two weeks, Foreman finally received corrected tax forms that she can use to get reimbursed for that tax penalty she had paid.
“I’m grateful that this is all going to be able to resolve that issue. But there’s many more who this is not happening for,” Foreman said.
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In a statement, TrueCoverage told Gray: “While we cannot comment on ongoing litigation, we strongly believe that the allegations are baseless and without merit.”
In a motion to dismiss the lawsuit, TrueCoverage and the other companies named in the suit even claim that the consumers who had gaps in their coverage suffered no “tangible loss.”
Attorneys representing TrueCoverage wrote in the filing that “these injuries,” essentially having no health insurance, “are neither concrete nor tied to any financial metric.”
Centers for Medicare & Medicaid Services full statement:
“CMS continues to exercise its full statutory and regulatory authority to protect the integrity of the Federally Facilitated Marketplace (FFM), which include FFM platform and State-based Marketplaces that operate on the federal platform.
“CMS continues to protect consumers from unauthorized changes to their FFM enrollments. This includes reviewing and addressing consumer complaints as quickly as possible, updating Marketplace systems to prevent unauthorized changes, including unauthorized cancellations, with as little disruption to consumer access to Marketplace enrollment as possible, arming consumers with resources and information to help them avoid and report unauthorized plan changes by agents and brokers, and suspending and terminating the Marketplace agreements of agents and brokers who have engaged in fraud or abusive conduct. Beginning July 19, 2024, CMS began blocking agents and brokers from making changes to a consumer’s FFM enrollment, unless the agent or broker is already associated with the consumer’s enrollment. If a consumer would like to work with an agent or broker not already associated with their profile, the consumer must conduct a three-way call with the Marketplace Call Center and the “new” agent or broker. The consumer can also submit the change to their enrollment directly through the Marketplace Call Center, HealthCare.gov, or an approved Classic Direct Enrollment or Enhanced Direct Enrollment partner website with a consumer pathway. This same logic prevents agents and brokers from canceling a consumer’s enrollment if they are not already associated with the enrollment, unless the consumer conducts a three-way call with the Marketplace Call Center and the agent or broker. The agency continues to conduct robust oversight and monitoring of agents and brokers on the FFM and is evaluating additional technological solutions to preserve access to high-quality, person-centered, and affordable health care coverage — a critical priority for CMS and the Biden-Harris Administration.
“In addition to these actions, CMS has proposed additional measures to prevent unauthorized Marketplace activity among agents and brokers in the Notice of Benefit and Payment Parameters for 2026 Proposed Rule. This includes strengthening review and enforcement actions, expanding authority to suspend agents and brokers, and updates to consumer consent forms.
“Protecting the millions of people served by CMS programs remains the agency’s top priority. CMS continues to leverage a broad array of resources to warn FFM consumers about potentially fraudulent agent or broker activity and misleading marketing websites.
“Consumers who believe they may have been the victim of unauthorized FFM agent or broker activity should call the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) to resolve any coverage issues promptly.
“From June 2024 through October 2024, CMS suspended 850 agents’ and brokers’ Marketplace agreements for reasonable suspicion of fraudulent or abusive conduct related to unauthorized enrollments or unauthorized plan switches. Agents and brokers who are suspended are prohibited from participating in Marketplace enrollment, including receiving related commissions.
“For additional information about CMS actions to prevent unauthorized agent and broker Marketplace activity, see the statement we issued Oct. 17, 2024.”
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