Fraudsters are tricking homeless people into signing up for ACA plans they can’t afford

Mary Zhelyazkova was surprised when pharmacists at Florida’s largest safety-net hospital said they couldn’t fill her prescription.

Zhelyazkova, 40, lived in a homeless shelter and needed Suboxone, a drug to manage opioid withdrawal symptoms.

He said he received Suboxone for free at the Jackson Memorial Hospital pharmacy through the Ryan White HIV/AIDS Program, which provides low- or no-cost medical care to people with HIV.

But in late 2021, she said, a stranger approached her on the street and offered her $5 to sign up for a free health insurance plan with Florida Blue. The person directed her to use a false address and falsify her income so she could be considered eligible for coverage, she said.

When the plan went into effect the following year, Zhelyazkova learned of the drawbacks.

Taking out private insurance disqualified her from Ryan White coverage. And Florida Blues’ network of providers didn’t include the hospital pharmacy; he was supposed to go to Walgreens which would have required transportation. He would also have to find a $20 copay, which he couldn’t afford.

I went into withdrawal. It was horrific, Zhelyazkova said, which she added was without medication for days, until a nonprofit needle exchange program paid for the drug.

Zhelyazkova is one of potentially hundreds of homeless people in Florida who have been approached by agents and brokers seeking commissions, enrolling them in zero-premium health plans on the Affordable Care Act marketplace, according to state insurance regulators, i doctors and counselors membership.

    Mary Zhelyazkova, 40, of Miami, said she accepted $5 from a stranger to enroll in a zero-premium health plan through the Affordable Care Act market in fall 2021. Zhelyazkova, who is homeless, doesn't qualify for coverage because you are not earning sufficient income.

Daniel Chang


KFF health news

Mary Zhelyazkova, 40, of Miami, said she accepted $5 from a stranger to enroll in a zero-premium health plan through the Affordable Care Act market in fall 2021. Zhelyazkova, who is homeless, doesn’t qualify for coverage because you are not earning sufficient income.

The presumption is that rogue agents and brokers are enlisting homeless people to earn a sales commission and are committing fraud by lying about income and home addresses of subscribers.

And although the federal government pays the monthly premium for low-income qualifying consumers on an ACA plan, policies often provide for upfront payments, deductibles, and other out-of-pocket costs that are unaffordable for people earning little or no income.

Amid increased reports, state and federal regulators are investigating cases of agents and brokers providing fraudulent information on ACA coverage applications.

The federal agency that oversees the ACA market said that for the fiscal year ended Sept. 30, 2022, the agency received more than 25,000 complaints from people who said they were signed up for policies without their consent or were Incorrect information has been submitted on a request from an agent or broker. The Centers for Medicare & Medicaid Services also said it performed more than 700 license audits to identify potentially problematic brokers during the same period.

Opportunistic recruitment of homeless people into ACA plans is most likely in states like Florida, one of 10 that have refused to extend Medicaid eligibility to nearly all low-income adults. In a 2015 case, a North Carolina officer registered hundreds of homeless people for ACA coverage. That state adopted Medicaid expansion in March, although the change has not yet been implemented.

In a state of expansion, most single adults in poverty would qualify for Medicaid. In non-growth states, including Florida, consumers generally must earn at least 100 percent of the federal poverty level to qualify for health care tax credits, which reduce monthly premiums and out-of-pocket expenses. In 2023, that would equate to $14,580 for a single person and $24,860 for a family of three.

But having no income this year doesn’t preclude a consumer from predicting they’ll earn enough next year to qualify for tax credits. Consumers are not required to document their income on a market application if government data shows their income was insufficient in previous years.

On the surface, it might appear that the uninsured homeless are gaining coverage, said Sabrina Corlette, a health insurance policy expert at Georgetown University. It’s not such a bad thing, she said.

But that doesn’t make it a victimless crime. The federal government ends up paying subsidies to health insurers to cover people who don’t qualify for the plans. Meanwhile, the homeless are losing eligibility for more suitable programs, such as Hospital Charity Assistance and Ryan White. This is a serious problem, Corlette said.

Physicians who work with the homeless also say interruptions in care put these patients at risk of relapse to drug use, a mental health crisis or having to stop ongoing treatment for chronic conditions, such as cancer and diabetes.

Patients are stuck in this situation where they can’t afford the copays under their insurance plan, said David Serota, an infectious disease specialist at the University of Miami Miller School of Medicine. But they also can’t get those services through our programs for the uninsured indigent.

Serota sees patients at Jackson Memorial, a Miami-Dade County hospital that provides charitable care. Over the past three years, she said, at least 20 of her patients, and many more seen by her colleagues, have been affected.

Canceling a new health insurance policy and applying for public benefits can take weeks or months. And the disruption may reinforce suspicions marginalized communities have about the system, said Erin Richards, a certified applications consultant and ACA program coordinator for Pinellas County, near Tampa. She has helped many people reapply for a local homeless resident program after being tricked into signing up for an ACA plan.

We’re working to get them to trust the systems again and get the care they need that they may have been neglecting for a long time, Richards said.

Agents and brokers have signed up consumers ineligible for ACA coverage since market enrollment began in fall 2013. It just hasn’t been at the level we’ve seen recently, said Katie Roders Turner, enrollment navigator and executive director of the Family Healthcare Foundation, a Tampa-based nonprofit that helps low-income residents access free or low-cost care.

Richards and Turner said the health insurer they see most often among the homeless is Florida Blue, the state’s largest health insurance company. Fifteen companies offer plans in Florida on the ACA market. Only Florida Blue provides coverage in all 67 counties in the state.

A Florida Blue executive said the company’s compliance team investigates people who wrongly enroll consumers for health coverage, but did not answer questions about how often such fraud occurs.

The most common way agents receive commissions is on a monthly per member basis. This means that for every consumer that an agent or broker signs up for, they receive a monthly commission for as long as that consumer is signed up.

Most plans pay $20 to $30 per member per month, estimates Dave Sherrill, an insurance broker and executive director of the Florida Association of Health Underwriters.

Florida’s insurance regulators are investigating the cases with police and CMS, said Devin Galetta, director of communications for the state Department of Financial Services and chief financial officer.

Since 2020, the state has received three consumer complaints about the matter, in South Florida and the Tampa and Gainesville areas, Galetta said. No arrests or administrative actions were taken, she said.

But Turner fears the incidents go unreported. This type of fraud can be difficult to investigate, he said, because victims who are homeless may fear law enforcement or are unwilling or unable to keep up with reports required to document such crimes.

This was a big challenge, Turner said.

New federal rules, finalized in April, require agents and brokers to document that consumers they sign up for coverage are eligible and to confirm the accuracy of application information.

CMS investigates agents and brokers identified as potentially problematic through data analysis or consumer complaints, Ellen Montz, deputy administrator and director of the Center for Consumer Information and Insurance Oversight at CMS, said in an email.

The agency can suspend or terminate an agent or broker’s ability to sell plans on the market or refer them to law enforcement agencies, Montz said.

But Corlette, the Georgetown expert, was amazed at how long it took CMS to require agents and brokers to document consumer consent for market coverage. It’s remarkable that it’s been almost 10 years here, she said, and they’re only now getting there.

    Kathryn Knox, 53, lives in a Miami homeless shelter.  Knox said over the years she's been paid to enroll in an ACA plan probably, like, five times.

Daniel Chang


KFF health news

Kathryn Knox, 53, lives in a Miami homeless shelter. Knox said over the years she’s been paid to enroll in an ACA plan probably, like, five times.

Montz said CMS worked with market health insurers to cancel more than 34,000 fraudulent policies in 2022, though it’s not known how many of those cases involved homeless consumers.

Richards, the ACA program coordinator near Tampa, said homeless fraud has been happening so often lately that she drafted a consumer advisory in March to warn of bad actors.

In Miami, Zhelyazkova is again enrolled in Ryan White, as well as an opioid use disorder treatment program at a homeless shelter. Among the many problems she faces, she said, are frequent propositions from strangers offering her money to take out free insurance.

Zhelyazkova’s roommate at the shelter, Kathryn Knox, 53, echoed her complaint.

They’re getting people steadily, Knox said, adding that over the years she’s been paid to sign up for an ACA plan probably, like, five times.

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