Coordinated Effort to Protect Marketplace Consumers Announced

A joint effort between HHS, the Attorney General, the Federal Trade Commission (FTC), and the White House was announced to protect consumers in the new Health Insurance Marketplace (Marketplace), which will be open for business starting on October 1. The Marketplace will allow individuals to purchase their own affordable health insurance coverage on their own, but doing so involves the transmission of a certain amount of personal information. The initiative is meant to prevent, protect against, and prosecute fraud and privacy violations.

Secretary Sebelius was quoted as saying that “[w]e have strong safeguards in the Marketplace to protect people’s personal information against fraud and we will work with our partners to aggressively prosecute bad actors, just as we have been doing in Medicare, Medicaid, and the Children’s Health Insurance Program.”

Initiative

HHS Secretary Kathleen Sebelius, Attorney General Eric Holder, and FTC Chairwoman Edith Ramirez, along with Maryland Attorney General Douglas Gansler, Kansas Insurance Commissioner Sandy Praeger, and senior White House officials met at the White House to kick off the interagency initiative. Included in the initiative to protect consumers are the following: (1) a new reporting mechanism allowing suspected fraud to be reported via a 1-800 number; (2) connecting consumers to the FTC’s Complaint Assistant through HealthCare.gov; (3) routing complaints through FTC’s Consumer Sentinel Network to ensure appropriate analysis and referral (the network will also monitor trends based on complaints within and across all states); (4) creation of a rapid response mechanism to react to data security breaches; and (5) educating consumers and assisters about these resources and how to identify a scam.

Enforcement

Among the enforcement authority will be: (1) criminal prosecution of those who gain unauthorized access to or misuse consumer’s personal information; (2) action taken by the Marketplaces against those that inappropriately charge fees for enrollment assistance; (3) restriction on the use or disclosure of applicants’ information, including civil monetary penalties up to $25,000; (4) tight regulation of insurance company activities; and (5) requirements imposed on state insurance commissioners to adopt privacy and disclosure requirements and face revocation of licenses if they are charged with identity theft violations.

The press release lauds that HHS, the Department of Justice, and the FTC are ready for any challenges that may arise with regard to Marketplace fraud and “will be using tried and tested methods for combating fraud associated with other government programs, so that consumers can confidently and securely shop for affordable health insurance.”