How to Avoid the Medicare Late Enrollment Penalty

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Key Takeaways:

  • The 3-way call requirement is a new measure to prevent Affordable Care Act fraud and unauthorized changes in Marketplace enrollments

  • CMS has reported tens of thousands of complaints about unauthorized plan switches and fraudulent enrollments

  • The "$6400 subsidy" is often misused in scams, though legitimate subsidies do exist

  • While aiming to provide consumer protection, the new policy poses challenges for honest insurance agents and brokers, especially small business owners

  • Consumers should stay vigilant and be prepared for a more involved enrollment process

If you've recently tried to enroll in or modify your health insurance plan through the Affordable Care Act (ACA) Marketplace, you might have encountered a new requirement: the 3 way call. This sudden change has left many consumers and insurance agents scratching their heads. Let's dive into why this new system change has been implemented and what it means for you.

Understanding the New CMS Policy

The Centers for Medicare & Medicaid Services (CMS) has introduced a new policy requiring a 3-way call between the consumer, the insurance agent or broker, and the Marketplace Call Center for certain enrollment actions. This change, effective July 19, 2024, is part of CMS’s efforts to combat unauthorized changes and enrollment fraud in the Marketplace.

What is a three-way call with the Marketplace?

A 3-way call in this context involves:

  1. You (the consumer)

  2. Your insurance agent or broker

  3. A representative from the Marketplace Call Center

This call is now required when an agent or broker who isn't already associated with your enrollment wants to make changes to your Marketplace plan.

The Scale of the Problem

The new policy didn't come out of nowhere. CMS has reported significant issues with unauthorized plan switches and enrollments. 

While CMS has reported significant issues with unauthorized plan switches and enrollments, a recent study by the Paragon Health Institute suggests the problem may be far more extensive than official figures indicate.

CMS Reported Issues

In the first half of 2024, CMS reported:

  • Over 73,000 complaints about unauthorized plan switches

  • More than 134,000 complaints about unauthorized enrollments

CMS claims to have resolved 97.97% of the plan switch complaints and 96.89% of unauthorized enrollment cases. These numbers are staggering, but they might just be the tip of the iceberg.

Paragon Health Institute Study Findings

However, the Paragon Health Institute's report, "The Great Obamacare Enrollment Fraud," paints a starkly different picture:

  • An estimated 5 million people are fraudulently enrolled in ACA plans

  • This fraud potentially wastes about $20 billion in annual tax dollars

The discrepancy between these figures is alarming. While CMS reports dealing with around 200,000 cases of potential fraud, the Paragon study suggests the problem could be 25 times larger.

State-Level Discrepancies

The Paragon study identified nine states where the number of enrollees reporting incomes between 100-150% of the federal poverty level exceeded the actual number of residents in this income bracket. For example:

  • In Florida, there were four times as many exchange enrollees reporting this income range as there were eligible Floridians

  • This over-reporting of low incomes to qualify for higher subsidies appears to be more than twice as common in states using HealthCare.gov compared to state-based exchanges

These findings suggest that the scale of potential fraud in ACA enrollments may be significantly underestimated by official figures. The disparity between CMS data and the Paragon study highlights the need for more comprehensive investigations and stricter verification processes in the ACA Marketplace. The product team plays a crucial role in addressing these discrepancies and improving the verification processes.

The "$6400 Subsidy" Controversy

You may have heard about the "$6400 subsidy" in relation to ACA plans. This refers to the Advanced Premium Tax Credit (APTC) that many Americans qualify for under the Affordable Care Act (ACA), commonly known as ObamaCare. However, the exact amount varies based on income and other factors.

It's important to note that some unscrupulous actors have been using the promise of a "$6400 subsidy" as a lure for fraudulent enrollment schemes. It's crucial to understand that while subsidies are real and beneficial for many, they're not a one-size-fits-all solution.

Impact on Insurance Agents and Brokers

For legitimate insurance professionals, especially small business owners, the new 3-way call requirement poses significant challenges:

  • Increased time spent on each enrollment due to the need for conference calls

  • Potential loss of efficiency and profitability

  • Difficulties in providing timely support to clients

Consumer Protection vs. Enrollment Efficiency

While the 3-way call requirement aims to enhance consumer protection, it's not without drawbacks:

Benefits:

  • Reduced unauthorized changes

  • Enhanced verification of consumer consent

Potential Drawbacks:

  • Longer enrollment processes

  • Possible barriers to receiving prompt assistance

A Critical Look at the CMS Policy

While the new CMS policy aims to protect consumers, it has sparked debate within the insurance community. Many professionals, especially small business owners, argue that this approach may be an oversimplified solution to a complex problem, and that this 'system change' fails to address the root causes of the problem.

Challenges for Legitimate Professionals

The requirement for 3-way calls creates significant burdens for honest, small-scale insurance brokers. This new process could result in:

  • Hours of accumulated time for each client interaction

  • Reduced profitability for small businesses

  • Difficulty in providing efficient service to clients

Balancing Fraud Prevention and Market Functionality

While the new policy may disrupt large-scale fraudulent operations, it also creates challenges for legitimate insurance professionals. A more balanced approach may be needed - one that addresses systemic issues allowing widespread fraud while preserving the ability of honest agents and brokers to serve their clients efficiently.

Call for Better Solutions

Many in the industry are advocating for more appropriate solutions that:

  • Effectively tackle fraud

  • Safeguard the ability of honest agents and brokers to operate efficiently

  • Protect consumers without penalizing legitimate professionals

Addressing Enrollment Fraud

CMS is taking a multi-pronged approach to combat fraud:

  • Suspending agent and broker agreements suspected of fraudulent activity

  • Launching social media campaigns to warn consumers about potential scams

  • Implementing stricter verification processes

What Consumers Need to Know

To protect yourself and navigate the new system:

  1. Be wary of unsolicited offers for health insurance, especially those promising large subsidies

  2. Verify the identity of anyone claiming to be a Marketplace representative

  3. Prepare for longer application processes due to the 3-way call requirement

  4. Don't hesitate to ask questions during the enrollment process

Steps for a Successful 3-Way Call

  1. Gather all necessary documents and information before the call

  2. Ensure you have a stable phone connection

  3. Be prepared to verify your identity

  4. Listen carefully and ask for clarification if needed

  5. Take notes during the call for future reference

Hope for the Future

While these changes may seem daunting, they do represent an important first step in fraud prevention and protecting consumers. The goal is to ensure that people receive the coverage they need without falling victim to scams. With time, we hope that the process will become more streamlined while maintaining its protective measures.

Taking Action

If you're concerned about these changes, consider reaching out to your local congressional representatives to voice your concerns. The goal should be to find a solution that maintains the integrity of the profession while addressing the serious issue of fraud.

Support and Resources

If you need help navigating the Marketplace or have questions about the 3-way call process, several support options are available:

  • Contact NavaQuote today, we're here to guide you through the process with transparency and expertise. Our team of licensed professionals understand the latest Marketplace regulations and can help you find the right coverage for your needs.

  • Contact the Marketplace Call Center at 1-800-318-2596

  • Visit HealthCare.gov for official information and resources

By understanding these changes and staying informed, you can navigate the new enrollment process with confidence and ensure you receive the coverage you need while protecting yourself from potential fraud.

Don't let the new 3-way call requirement stop you from securing the health coverage you deserve through a reputable insurance broker. Call NavaQuote today to explore your options and get personalized assistance from agents who put your interests first. Let's work together to ensure you have the protection and peace of mind you need in these changing times.

FAQs

Why is a 3-way call suddenly required for Marketplace enrollment?

The 3-way call requirement was implemented to combat unauthorized changes and reduce Affordable Care Act fraud in ACA Marketplace enrollments.

Is the $6400 subsidy a scam?

The "$6400 subsidy" is often used in scams and is a misrepresentation of the Advanced Premium Tax Credit (APTC) available under the ACA. Be cautious of any promises of a specific subsidy amount without proper evaluation.

How long does a 3-way call with the Marketplace typically take?

The duration can vary, but you should be prepared for the application process to take longer than previous enrollment methods, especially during peak times.

Can I still enroll in a Marketplace plan without a conference call?

Yes, you can enroll directly through HealthCare.gov or state-based exchanges without a 3-way call.

What should I do if I suspect unauthorized changes to my health insurance?

Contact the Marketplace Call Center immediately at 1-800-318-2596 to report and resolve any unauthorized changes.