Deception By Health Insurance Sales Reps Can Lure Consumers Into Costly Mistakes, GAO Warns

Christel Deskins

Deception by private health insurance sales agents can lead consumers into making costly mistakes, the Government Accountability Office (GAO) warned in a report released today. “Sales representatives in some cases (engage) in potentially deceptive marketing practices that could lead a consumer to make poor decisions with the potential to incur […]

Deception by private health insurance sales agents can lead consumers into making costly mistakes, the Government Accountability Office (GAO) warned in a report released today.

“Sales representatives in some cases (engage) in potentially deceptive marketing practices that could lead a consumer to make poor decisions with the potential to incur significant and unexpected costs if plans purchased do not meet their health coverage needs,” researchers for the investigative arm of Congress wrote.

Their conclusions came after GAO undercover investigators called 31 sales agents saying they were interested in buying private health plans and asserting they had pre-existing conditions, such as diabetes.

Eight sales reps claimed the plans they were selling covered the pre-existing conditions when in fact they did not.

In two cases, the investigators said the salespeople were not always consistent or clear in their explanation of the type of coverage and plans they were presenting but did not appear to be deceptive.

Twenty one of the 31 sales representatives contacted told the undercover agents about plans that complied with the federal Patient Protection and Affordable Care Act (PPACA).

Since 2014, the law has prohibited private plan insurers from excluding coverage or charging higher premiums for pre-existing conditions and required that individual market plans cover a set of essential health benefits, including coverage for mental health and substance abuse disorder services, prescription drugs, and maternity and newborn care.

Several states have raised concerns that private health insurance sales representatives may try to sell consumers plans exempt from PPACA regardless of their suitability for the individual, the report noted.

The authors said representatives may mischaracterize the health coverage they offer because they could be rewarded by sales incentives.

GAO undercover investigators made their calls from November through January to sales representatives in in Alabama, Florida, Kansas, Pennsylvania and Wyoming.

The full report:

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