Eight of 31 Non-ACA Health Agents Flunk GAO Honesty Test

One investigator, for example, called a rep who sold short-term health insurance. The investigator called outside of the open enrollment period and pretended to have heart disease.

Here's how the GAO directors describe that encounter:

The sales representative appropriately referred us to a Patient Protection and Affordable Care Act (PPACA)-compliant plan. Specifically, during the call, the sales representative stated that a short-term insurance plan would not provide coverage for us due to our pre-existing condition. The representative further explained the steps we should take to obtain the proof necessary to qualify for a Special Enrollment Period in order to buy a PPACA-compliant plan outside of open enrollment

But two excepted benefits reps gave information that was unclear or incomplete, the GAO directors say.

Seven of the excepted benefits reps, and the health care cost sharing ministry rep, "engaged in potentially deceptive marketing practices, such as claiming our pre-existing condition was covered when the health plan documents we received after purchase said otherwise," the directors write.

In one case, for example, an investigator pretended to have diabetes and called a rep who sold limited-benefit plans.

Here's how the GAO officials describe that encounter:

The representative told us that he was enrolling us into a health plan that was subsidized by the state due to our low income, and that the state required us to purchase supplemental insurance in order to receive these benefits. Moreover, the representative told us that the state subsidy was not available to anyone if they received comprehensive medical insurance. However, when we subsequently asked another representative for clarification on this issue, the representative told us that the state had nothing to do with the product we were purchasing and that the state was not providing any financial assistance.

The first rep told the undercover investigator that the limited-benefit plan would cover emergency room visits completely, even though the plan provided no benefits for emergency room treatment.

The rep also told the investigator that the investigator would get free diabetic medication. Instead, "we were enrolled in two non-insurance prescription discount programs that would not provide us with our prescription for free," officials write.

The first rep also:

• Failed to tell the investigator that the investigator was being enrolled in an accidental death and dismemberment policy or joining a small business advocacy, education, and service association.
• Told the investigator that the investigator did not need to read the policy application before signing and enrolling, because the application did not contain information that pertained to the investigator's coverage.

Several other reps also refused to provide plan documents until the caller had signed up for coverage.

When an undercover investigator called the health care cost sharing ministry rep, during the ACA open enrollment period, the rep described the arrangement as insurance that met ACA requirements and that was sold by an insurance carrier, GAO officials say.

The rep "did not state that it was a non-insurance health share plan," officials write.

The health care cost sharing ministry rep also claimed that the investigator was unlikely to be able to get individual major medical insurance in the investigator's state, even though several ACA-compliant individual major medical insurance policies were available in that state, officials write.

"The representative also told us that we would be required to enroll in the plan prior to receiving documents describing the policy's coverage," officials say.

Impact

The GAO conducted the investigation for two Democrats in the Senate, which is controlled by the Republicans. That means the study might not get much attention in the Senate, unless and until the Democrats regain control of the Senate.

But the GAO directors say they intend to talk to the Federal Trade Commission and state insurance regulators about the sales reps who appeared to be engaging in deceptive sales practices.

Representatives for the U.S. Department of Health and Human Services said in a comment on the GAO's findings that HHS takes consumer protection very seriously.

States are responsible for overseeing the sales of excepted benefits products, but HHS has some ability to oversee agents and brokers who sell individual coverage through HealthCare.gov, HHS officials said.

"HHS plans to review any sales representatives who GAO identified as engaging in potentially deceptive marketing practices to determine if they are registered with the exchange," HHS officials said. "If they are registered, HHS will take appropriate action within the scope of our authority."

— Read Short-Term Health Insurers Are Mobilizing, Too: Jeff Smedsrud, on ThinkAdvisor.

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