HHS tweaks marketplace rules to reduce fraud

In another example of financial incentives attracting fraud, Kaiser Health News reported on agents and brokers who have signed up clients for the insurance marketplace without the clients' knowledge or consent. Agents and brokers have their places, especially when consumers are dealing with complex insurance topics. Commissions to agents and brokers are mainstream, and perhaps all the more expected when the government is trying to increase adoption. At the same time, it is probably not surprising that some unscrupulous agents and brokers have tried to take advantage of the situation.

Enrollment in the healthcare insurance exchanges is a special case in that people whose income falls below a certain threshold do not need to pay the insurance premiums (the government will pay it as part of the Affordable Care Act). In contrast, other types of insurance are not as generously subsidized, meaning that it is much less likely for this particular fraud to be perpetrated in those other industries, since insurance companies know much sooner when the premiums are not being paid. The article reports that the department of Health and Human Services is rolling out changes to their process, presumably in an effort to curb the potential for this type of fraud.