From TX Assoc. of Health Underwriters
With major parts of the Affordable Care Act (ACA) taking effect in the coming months, the Texas Association of Health Underwriters is warning consumers to be wary about releasing personal information in the process of purchasing health coverage to comply with the new law. Attempts to defraud consumers have already been reported as scam artists attempt to exploit confusion about the law and illegally gain access to social security numbers, credit cards, bank accounts and other personal information.
While the federal government has provided millions of dollars for navigator and other consumer assistance programs to assist with the rollout of the ACA, the lack of screening, training and accountability of those efforts has raised additional concerns about the privacy and security of sensitive information. These concerns prompted 13 state attorneys general, including Texas Attorney General Greg Abbott, to request in August that stronger safeguards be considered by the federal government to protect consumers.
Beginning in October, consumers and small employers will have the option to purchase health insurance through Health Insurance Marketplaces, referred to as Exchanges. Many consumers will find themselves facing decisions regarding coverage, co-pays and co-insurance that they have not previously considered. The potential for fraud, combined with concerns about inadequate protections in the government’s outreach efforts, have advocacy and professional groups warning that unfamiliarity with the law and details about insurance coverage could make individuals vulnerable targets for identify theft and other scams. As part of the enrollment in a health plan, consumers will be providing sensitive personal data on applications, putting their information at risk for potential misuse.
Mark Bellman, president of the Texas Association of Health Underwriters, stated, “The rollout of the Affordable Care Act could prove to be a perilous time for consumers who fail to exercise caution and prudence in their attempts to purchase health insurance in the months ahead. If consumers purchasing coverage are not confident in their decisions, the process, or the individuals with whom they are dealing, then it is recommended that they seek the advice of a professional benefit adviser in their area.”
Bellman continued, “If someone purchasing coverage suspects fraud, then it should be reported immediately to law enforcement officials or the Texas attorney general’s Consumer Protection Division.”
Scams involving phone calls and letters fraudulently claiming that all Americans will need a government-issued health card have already been reported. Elderly, low-income and uninsured consumers are primary targets for fraudulent activity.
“The scams can be phone calls, letters, emails, even someone at your door,” said Bellman. “Scammers are representing themselves as part of the government-required health insurance plan. Because consumers do not understand the law, they are vulnerable to having their financial records and medical information illegally accessed.”
The Federal Trade Commission (FTC), the nation’s consumer protection agency, is warning consumers about giving out personal or financial information in response to the Affordable Care Act. According to the FTC, scammers are using the Affordable Care Act as a hook to illegally access consumer information. Scammers will try to gather bank account numbers, credit cards or other personal information. As the FTC warns, scam artists want information to commit identity theft, charge existing credit cards, debit checking accounts, open new credit cards, write fraudulent checks or take out loans.
Bellman added, “Many of the organizations participating in the government’s navigator program are recognized and respected groups that make significant contributions to our society. While their efforts are well-intentioned, we may be placing an unrealistic burden on them given their lack of insight and experience in providing counsel on coverage options and in managing sensitive personal data.”
In their letter, the attorneys general cite the standards of health agents and brokers that include “strict state-level exam-based licensing laws and annual continuing education requirements, as well as significant federal and state privacy, security and market conduct requirements.” The attorneys general reference the Exchanges’ “lack of standardized background checks” for individuals who may have access to sensitive consumer data as an example of the need for stronger consumer protections. The attorneys general point out that health agents are obligated to maintain professional liability insurance and are personally liable if they fail to comply with state and federal laws and requirements.
To identify a local benefit adviser that can assist with questions about the Affordable Care Act, individuals may go to ACA Questions.