Fraud among some health insurance agents
April 07, 2024
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April 07, 2024
The federal health insurance exchange for the Affordable Care Act wants to make it easy for patients to sign up for and switch health insurance plans. However, is it too easy? KFF Health News reports on the increasing fraud among health insurance agents vying for monthly commissions. Apparently, with "only a person's name, date of birth, and state," an agent can switch a patient from one plan to another. Patient consent is assumed, but there seems to be inadequate measures to verify such consent.
Beyond being an inconvenience, such switches can have severe financial consequences, such as patients owing thousands of dollars for higher premiums that they did not sign up for. Patients might also delay medications and surgeries if they find out that their new plans do not cover what they need.
At least some state exchanges have implemented measures to thwart such fraud: "In Colorado, for example, customers create accounts on the state's online market and can choose which brokers have access. Pennsylvania has a similar setup. California sends a one-time password to the consumer, who then gives it to the agent before any changes can be made."
Where there is sufficient financial incentive, it seems that it would only be a matter of time before a naive system built on trust is abused. While the Centers for Medicare and Medicaid Services has announced plans to curb such abuse, it is concerning that they did not anticipate these problems earlier.
March 31, 2024
KFF Family News reported on recent legislation in California that allows teenagers on Medi-Cal insurance (in California) to gain access to mental health counseling without needing authorization from parents. Some lawmakers voted against the legislation, with the sentiment that "If my child is dealing with a mental health crisis, I want to know about it." However, teenagers on private health insurance plans already have access to mental health counseling without requiring parental authorization.
Both sides likely have a reasonable basis for their arguments: on one hand, parents should be involved with and consent to mental health treatment of their children, but on the other hand, there might be some situations (especially in abusive or neglectful households) where such requirements prove harmful. The particular example of the teenager who championed the legislation does not seem compelling based on what is presented in the article, although her accomplishment in seeing her advocacy result in a new law is noteworthy. Either way, there does seem to be an issue of consistency, where the requirement to have parental consent should not depend on whether the health insurance is private or public.
March 24, 2024
Mental health continues to grow as an issue, and not everyone has access to a mental health therapist. KFF Health News reported on California's creative effort to help alleviate the shortage of mental health professionals by paying for peer support leaders to conduct group therapy sessions. Being able to share one's difficulties and to connect with others seem to be helpful with regards to people's mental health, and those activities do not require mental health professionals. While not a complete solution, this approach seems to benefit those who cannot afford to see mental health professionals, and likely also benefits the peer leaders themselves.
The article listed some reasons that local governments encounter when trying to hire enough mental health therapists, including offering salaries that are lower than industry and not offering perks like remote work. A fuller solution likely involves increasing salaries, and perhaps for the longer term, increasing the supply of mental health professionals (for example, by offering tuition subsidies in return for agreement to work for the government).
March 17, 2024
KFF Health news reported on the increasing prevalence and impact of contract disputes between healthcare providers and payers ("21 insurer-provider standoffs in the third quarter of 2023, a 91% increase over the same period the year before"). When providers and payers cannot come to an agreement, patients suffer the hassle of finding new doctors who are in-network. Even when providers and payers do come to an agreement, it is often at the end of a game of brinkmanship in which patients are warned to prepare for the possibility of needing to find new doctors.
The article does point out the asymmetry where patients can only select a health insurance plan once a year (absent certain life events), but providers can leave an insurance network at any point in a year. The article comments "That is particularly galling for patients because, whether obtaining insurance through an employer or buying it on the marketplace, they generally choose a policy based on whether it covers their desired doctors and hospital or an expensive drug they need." It seems reasonable to require that in-network status for provider institutions (e.g. clinics or hospitals) must be made known at least one month before open enrollment, and by contract, should remain in effect for the entire year following that open enrollment period.
One law professor speculates that the rise in contract disputes is because of hospital price transparency regulations that went into effect in 2021. Since providers can now see how much payers are paying their competitors, they can use that information to negotiate for better compensation -- if so, this is most likely an unintended consequence of the pricing transparency regulation.
March 10, 2024
Millions of Americans have medical debt. KFF Health News reports that "More than 100 million people in America — a startling 41% of adults — are saddled with medical bills they cannot pay," while Health System Tracker (a collaboration that involves KFF) says that "20 million people (nearly 1 in 12 adults) owe medical debt." Regardless of the actual number, the issue seems common enough that KFF Health News published a piece outlining some of the efforts that the Consumer Financial Protection Bureau is taking to address the issue. Among them, "In the past two years, the CFPB has penalized medical debt collectors, issued stern warnings to health care providers and lenders that target patients, and published reams of reports on how the health care system is undermining the financial security of Americans."
As another step, the federal agency is reported as trying to prevent medical debt from appearing on consumer credit reports. An interesting argument is that "the agency found that medical debt is typically a poor predictor of whether someone is likely to pay off other bills and loans." The original intention of credit reports was to help lenders assess whether an individual is likely to repay loans, so if medical debt is a poor predictor, then it appears less relevant to one's credit report than other factors.
Perhaps an even stronger argument is the sheer volume of mistakes in medical billing "Medical debts on credit reports are also frequently riddled with errors, according to CFPB analyses of consumer complaints, which the agency found most often cite issues with bills that are the wrong amount, have already been paid, or should be billed to someone else." Medical bills can be difficult to understand, expensive, and correcting them can take patients an inordinate amount of time. With that in mind, perhaps unpaid medical debt should be treated differently from other types of debt.