Agents are selling unaffordable insurance plans to the state’s homeless population.
A recent report by Daniel Chang of Kaiser Health News has revealed a disturbing and widespread trend of fraud in Florida, shedding light on the exploitation of homeless individuals through enrollment in unaffordable Affordable Care Act (ACA) plans. This practice particularly affects Florida, one of the ten states that have not adopted the ACA’s expansion, leaving countless adults without access to Medicaid coverage. The consequences of crooked insurance brokers are dire and have exposed the urgent need for systemic changes to protect vulnerable populations.
Commission-seeking insurance brokers actively target homeless individuals in Florida, luring them with zero-premium health plans available on the ACA marketplace. Despite their income levels typically rendering them ineligible for the plans, these insurance brokers coerce the homeless individuals into providing false income and housing information to qualify. Once the insurance plans become effective, homeless individuals find themselves in increasingly precarious healthcare situations. They lose access to previously free medications provided by state and federally funded programs and face copayments that make it nearly impossible to afford the treatments they once received at no cost. As a result, their health deteriorates, and, in cases of untreated addiction, withdrawal symptoms often arise, exacerbating their already vulnerable circumstances.
The motivation behind this fraudulent scheme lies in the profit potential for agents and brokers. They receive commissions on a per-member, per-month basis, creating a strong incentive for continued enrollment. These commissions typically range from $20 to $30 per member per month and continue as long as the individual remains enrolled.
Effectively addressing the scheme poses numerous challenges. Homeless individuals often harbor deep mistrust toward law enforcement, making it difficult to obtain their cooperation and gather evidence. Furthermore, until last April, agents were not required to confirm the accuracy of application information, enabling the falsification of documents. While recent federal rules now mandate consumer consent for marketplace coverage, critics and policy experts express astonishment at the nearly decade-long delay in implementing these necessary changes after the introduction of the ACA.
The exploitation of homeless individuals in ACA plans extends beyond Florida, too, with similar cases occurring since the inception of the Affordable Care Act in other states. In a notable example from 2015, an insurance broker in North Carolina falsified income information and sold policies to hundreds of homeless individuals, resulting in $5000 deductibles and the loss of access to low-cost medical treatment for victims. These recurring incidents highlight the urgent need to address the systemic vulnerabilities that perpetuate such exploitation.
While recent policy changes by the Centers for Medicare & Medicaid Services offer hope in deterring fraudulent behavior, comprehensive and collaborative efforts are imperative to safeguard against these practices. Strengthening enforcement mechanisms, enhancing consumer protections, and raising awareness among homeless individuals about their rights and the risks associated with unauthorized enrollment are critical steps forward. Proactive initiatives involving law enforcement agencies, social services, and healthcare providers are essential in preventing such exploitation and effectively responding to cases that do arise.
The alarming reality of fraudsters targeting homeless individuals in ACA plans underscores the deep-rooted systemic challenges within healthcare systems. Urgent action is required to ensure the safety and well-being of vulnerable populations, with a strong focus on proactive measures that prevent exploitation and promote equitable access to healthcare for all.