Member Defense Network Launches to Prevent Unauthorized Switching in ACA Marketplace

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Industry leaders are taking steps to combat unauthorized plan switching in the Affordable Care Act (ACA) Marketplace. Unauthorized switching occurs when a user’s plan or agent of record is changed without their knowledge or consent. This is a form of fraud and can cause users to face unexpected costs, along with other consequences.

Insurers across multiple states have joined together to form a network to prevent users from facing unauthorized switching.¹ These insurers include BluCross BlueShield of North Carolina, Group Health Cooperative of South Central Wisconsin, Highmark BlueCross Blue Shield, and others. The network is named the Member Defense Network and it will launch in Florida in July, 2024.

According to a press release, the network’s partners represent over 45,000 insurance agents and brokers.

The cause of unauthorized switching has been a topic of debate. In May of this year, the National Association of Benefits and Insurance Professionals (NABIP) responded to a statement from CMS that targeted agents and brokers as the culprits. Instead, the NABIP argues, the cause of the problem are automated systems that take advantage of technical flaws in the marketplace.²

In a press release, NABIP CEO Jessica Brooks-Woods said, “We are deeply troubled by the portrayal of health insurance agents and brokers in the CMS statement. What was not addressed is the possibility that a large number of these unauthorized plan switches are due to technological vulnerabilities that allow automated systems to make the switches, not the unethical practices of agents and brokers."

She continued, “We have presented evidence of systems switching thousands of consumers within mere minutes—a task impossible for humans. This clearly indicates a need for enhanced security protocols within the systems used by CMS."

"One of our members lost several thousand clients in less than three minutes due to these vulnerabilities," Brooks-Woods added. "These incidents not only represents a significant revenue loss but also disrupts the trust and relationship established with healthcare consumers."

“A simple click is not a sufficient barrier against the sophisticated tactics employed by these high-tech automated systems, she explained. “Other industries have adopted more secure methods, and it's time for the health insurance marketplace to follow suit," Brooks-Woods asserts.”

She concluded, "As a broker committed to helping consumers access affordable insurance while adhering to extensive government regulations, it's frustrating for our profession to be blamed," stated NABIP President Eric Kohlsdorf. "NABIP members adhere to a strict ethical code designed to support, protect, and advocate for Americans and our industry. NABIP is eager to collaborate with all stakeholders to find solutions and protections that Americans deserve."

Sources

1. Member Defense Network Launches to Protect Affordable Care Act Enrollees from Unauthorized Plan Switching [and Other Forms of Fraud]. Member Defense Network. July 16, 2024. Accessed July 17, 2024. https://www.prnewswire.com/news-releases/member-defense-network-launches-to-protect-affordable-care-act-enrollees-from-unauthorized-plan-switching-and-other-forms-of-fraud-302198629.html
2. NABIP Responds to CMS Statement on Plan Switching in the ACA Marketplace. National Association of Benefits and Insurance Professionals. May 14, 2024. Accessed July 17, 2024. https://www.prnewswire.com/news-releases/nabip-responds-to-cms-statement-on-plan-switching-in-the-aca-marketplace-302144459.html