Policy Documents

Risks of Fraud and Misinformation with ObamaCare Outreach Campaign: How Navigator and Assister Program Mismanagement Endangers Consumers

Committee on Oversight and Government Reform –
November 18, 2013

The Patient Protection and Affordable Care Act, also known as ObamaCare, requires states to establish “Navigators” to conduct outreach about the law, provide fair and impartial information to consumers, and facilitate enrollment in new health insurance exchanges and state Medicaid programs. However, ObamaCare explicitly prohibited states from using federal exchange establishment grants to fund Navigator organizations; instead ObamaCare required that Navigators receive funding from a state exchange’s operational funds. When several states objected to financing Navigators with state revenue, the Administration created a twin program called In-Person Assisters (Assisters) in states with state-based exchanges, effectively circumventing the statutory restriction on using federal exchange establishment grants to fund the Navigator program. This year alone, the Administration will provide several hundred million dollars of unauthorized taxpayer funds to Assister organizations.

The Administration’s improper creation and funding of the Assisters program as a “de facto” Navigator program is just one of many concerns regarding Navigators and Assisters. First, the Administration has failed to create adequate training standards for Navigators and Assisters, even though the Administration assumes most Navigators will lack prior knowledge of ObamaCare or health insurance markets. The training program for Navigators and Assisters states that it will only provide “approximately five to 20 hours of training,” down considerably from HHS’s previous estimate that it would take 20 to 30 hours to complete the online training. Although individuals employed by Navigator or Assister organizations must pass exams, the exams are conducted online and individuals may attempt the exams an unlimited number of times.

Second, allowing organizations that receive Navigator and Assister funding to pay their employees based on the number of individuals they enroll creates an incentive for those employees to provide biased or incomplete information about ObamaCare to maximize enrollment. Third, despite the statutory requirement that Navigators and Assisters be free of conflicts of interest, the Administration has decided that individuals employed by Navigator and Assister organizations will not have to disclose that they are paid per enrollee to individuals with whom they interact. Fourth, neither Congress nor an independent entity reviewed the training materials for Navigators and Assisters, despite the statutory requirement that Navigators provide “fair and impartial information.” Moreover, the incentives that encourage Navigators and Assisters to maximize enrollment raise the risk of massive fraudulent spending on Medicaid and exchange subsidies for individuals who do not meet eligibility requirements.

Although the structure of the Navigator and Assister programs could potentially lead to consumers receiving incomplete and inaccurate information about the law, the main concern for consumers is the heightened risk of identity theft and financial loss from a poorly managed outreach campaign. Navigators and Assisters will come into contact with a plethora of personally identifiable information (PII), including an applicant’s Social Security number, date of birth and income, as well as the PII of everyone in an applicant’s household. Some of the training received by Navigators and Assisters will be related to consumer protection and privacy standards, but substantial risks remain. In part, substantial risks remain because the Administration decided not to require background checks and fingerprinting of individuals hired by Navigator and Assister organizations. Under the Administration’s plan, unless states have already taken actions to protect their citizens, Navigators and Assisters are not prohibited from hiring convicted felons, including individuals convicted of identity theft or fraud. State efforts to protect citizens from the fraud and identity theft risks posed by Navigators and Assisters have largely been stymied by the Health and Human Service Department’s (HHS) delay in releasing regulations and guidance about the Administration’s planned outreach campaign for ObamaCare.

In addition to the risks associated with an insufficient training program and the lack of background checks, there are already numerous reports of scam artists posing as Navigators and Assisters to take advantage of people’s confusion about ObamaCare. According to recent news reports, scam artists are calling individuals and asking for information to sign them up for their “ObamaCare card,” are asking seniors for their personal information to verify their Medicare and Social Security status and are going door-to-door threatening people with prison time if they do not sign up on the spot. The Administration is keenly aware of these reports and concerns, but has thus far failed to take appropriate measures. For example, both Gary Cohen, the Director for the Center for Consumer Information and Insurance Oversight at HHS, and Vicki Gottlich, the HHS official in charge of the day-to-day development of the Navigator and Assister programs until June 2013, testified that direct solicitation was inappropriate, yet the Administration has not clarified which Navigator and Assister marketing practices are allowed and which are prohibited.  

The Committee has also learned that senior HHS officials raised concerns about the government’s inability to authenticate individuals operating as Navigators and Assisters in May 2013. In response to this concern, HHS considered creating a list of certified Navigators and Assisters for consumers to use as a resource. However, HHS decided against the creation of such a list, and Ms. Gottlich testified that consumers will have no reliable way to learn the identity and association of individuals offering to assist them with enrolling in ObamaCare. The failure of the Administration to provide clarity about prohibited marketing and solicitation techniques and to provide consumers with a list of authenticated Navigators and Assisters substantially increases the number of Americans likely to fail prey to fraud and identity theft.