A North Carolina insurance broker is under fire for supposedly targeting vulnerable members of society for sales of individual health insurance policies that are earning him an estimated $9,000 a month.
According to local news reports, Charlotte-based agent Will Kennedy has enrolled more than 600 homeless citizens in health plans he pitched as “free,” having collected the names and Social Security numbers of people using homeless shelters and urban ministries throughout the state.
Kennedy encouraged a number of applicants across the Carolinas to report income from panhandling and “street hustling” at $11,700 a year – the income level at which the federal government will foot the entire bill for a high-deductible insurance plan.
The catch?
Such plans leave the policyholder subject to a $5,000 deductible and render them ineligible for free medical care they had relied on in the past.
“We have people who really need their medicine, and we can’t give it to them,” Susan Royster, a representative with free prescription drug service NC MedAssist, told the Charlotte Herald.
Beyond the obviously unaffordable deductible, some of Kennedy’s enrollees are now receiving letters from the government demanding documentation of their income – something Kennedy did not have them provide. Others say Kennedy did not have them provide an income estimate at all.
That could leave enrollees liable for a $25,000 penalty for providing false income estimates, or even a potential ban from receiving ACA subsidies in the future if they do not file a tax return for 2015.
Though refusing to report income or share information on his employees, Kennedy stood behind his business, which some say earns him about $9,000 a month for 600 policies.
“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 insurance for which they are eligible,” Kennedy told reporters. “I believe in what I’m doing.”
The agent said he is directing applicants to use their federal subsidies to buy a bronze plan through CoventryOne Insurance, for which the government pays $2,556 annually per policy. Policyholders, then, are responsible for paying $15 per primary care visit, $75 to see a specialist and $250 to visit an emergency room.
Other care requires a $5,000 deductible with a $6,600 out-of-pocket cap – the highest allowable under the Affordable Care Act.
Activists say the insurance policies are preventing homeless people from using free clinics in the neighborhood and other care facilities geared toward low-income people. In exchange, they’re getting policies many say are unusable.
“You might as well ask them to fly to the moon,” said Georgetown Center on Health Insurance Reforms Senior Research Fellow Sabrina Corlette.
Complaints against Kennedy have been filed with the North Carolina Department of Insurance, including for suspected fraud – one agent filing a large number of applications with identical incomes and repeated home addresses (largely of local shelters) within two days looks suspicious.
A local insurance agency also said it disabled Kennedy’s access to the ACA enrollment software after learning about his tactics.
Kennedy, however, says he is filling a gap created with North Carolina failed to expand access to Medicaid to state residents. When a homeless man approached him on a health insurance question in 2013, Kennedy researched the matter and signed up to sell policies less than a month before the open enrollment period began.
He says having the homeless carry an insurance policy is better than resigning them to free clinics because they can get expensive hospital procedures performed that are not considered emergency care.
“I really did my due diligence,” he said. “I wish they would expand Medicaid. That should solve the problem.”
