July 19 2013
Patrice J. Lee
California insurance and consumer groups fear the state's healthcare exchange may recruit scammers and thieves to sell insurance.
Consumer groups are raising concern that the state’s health care exchange needs to do more to ensure that people hired as enrollment counselors aren’t thieves and criminals waiting to prey on the innocent. They are worried about the potential for fraud, identity theft and other crimes.
Covered California, the state’s exchange, has hired more than 21,000 enrollment counselors who will provide in-person assistance as a part of the Affordable Care Act (aka “ObamaCare”). These workers, farmed from thousands of community organizations including ethnic associations, chambers of commerce, labor unions and faith-based organizations, will be authorized to help people purchase insurance and navigate the healthcare labyrinth. They will in some cases be privy to personal, medical and financial information including names, social security numbers, addresses, financial information, and even medical histories.
Surely, the state will recruit only those individuals who can demonstrate integrity and honesty, right? If comments from the policy analysis director at the California Pan-Ethnic Health Network, a multicultural health organization, are true, I wouldn’t count on it. Here’s what she said:
"We don't want applicants from communities where the exchange really needs to reach out to being sent away because they made a mistake in the past or bounced a rent check or have maybe a minor drug offense. It doesn't have a bearing on their ability to provide the appropriate assistance to their communities."
A past bounced check does not have a bearing on someone’s ability to provide appropriate assistance? I’ve watched enough TV cop shows to know that past offenders are –often appropriately– among the primary suspects. Yes, it's good to give people second chances and help reformed criminals be reintegrated into society through employment opportunities, but I doubt Bank of America gives someone convicted of fraud and theft the keys to the vault.
The state’s Insurance Commissioner Dave Jones and anti-fraud groups are concerned too. According to Jones the exchange does not have a plan to investigate any complaints that might arise once the counselors begin their work such as bogus health care products, identity theft and other abuses.
Last month, Covered California’s board established a code of conduct; adopted regulations to require that enrollment counselors get fingerprinted, undergo background checks, and wear name badges; and adopted plans that include sending out field monitors and "secret shoppers" to screen counselors.
That may not be enough though if –as Jones notes– there is no way to follow-up on fraud complaints and work with law enforcement to prosecute bad behavior.
We’ve seen in the past few weeks that ObamaCare appears to coming apart at the seams as the realities of implementing a behemoth bill at the state level become apparent. Added to the economic pressure on businesses, taxes and penalties to individuals, effect on hiring, and the erosion of our freedoms as Americans, there would be very real concerns about Covered California's carving out a new place for fraud, theft and abuse. And California won’t be the only state to face such challenges.
When we consider that the California health exchange will create incentives for fraud by paying organizations $58 for each successful enrollment and $25 for a renewal, it’s not hard to see how these incentives could drive unscrupulous behavior. Insurance Commissioner Jones says it well, “We can have a real disaster on our hands."