Amid an investigation by the North Carolina Department of Insurance, Aetna announced that it was severing ties with an insurance agent who admitted to selling high-deductible insurance plans to homeless in North and South Carolina by instructing them to misreport their income, according to The Charlotte Observer.
In an Observer article published last month, the insurance agent, Will Kennedy, explained that he recruited homeless people in North and South Carolina to report an annual income of $11,700 from panhandling, just enough to receive the maximum federal subsidy through the Affordable Care Act that covered the entire premium of the plan. However, the plans carried a $5,000 deductible and meant the beneficiaries were ineligible for other state services reserved for low income, uninsured residents.
"What I have done, and what I make no apology for, is to work diligently to inform low-income individuals about their rights under the ACA and to help those who qualify obtain the health insurance for which they are eligible," Kennedy told the Observer in June.
The suspected fraud scheme was first reported in April by George Kalogeropoulos, president of HealthSherpa Insurance Agency, a software company that facilitates ACA enrollment. The company noticed that more than 600 people had signed up for high deductible plans in North and South Carolina, reporting an income of $11,700 and listing the Urban Ministry Center in Charlotte as their home address.
Aetna spokesman Walt Cherniak confirmed to the newspaper that the company had terminated Kennedy, but declined to divulge how many high-deductible plans were sold.
It's not the first fraud scheme to implicate the homeless. In April, 23 people were arrested for performing medically unnecessary tests and falsely billing federal programs to homeless and poor New Yorkers by offering them free sneakers. In 2014, FierceHealthPayer: AntiFraud reported on numerous fraud schemes involving the homeless, including one doctor that billed Medicare and Medicaid more than $1.8 million.
- read The Charlotte Observer article
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