The Obamacare Boiler Room
Just four miles north of Mar-a-Lago, two men in their mid-forties are currently on trial for conspiracy to defraud Obamacare of $161 million via a family insurance brokerage called the Fiorella Insurance Agency. Their alleged scheme was a variation on a rich Florida tradition that dates back at least to the late 1960s: use fancy luncheons and freebies to induce poor and desperate people to sign up for government-subsidized insurance plans, count on poverty and desperation to keep them from complaining too loudly when and if their claims get denied, buy yacht(s).
Since the first experiments in Medicare and Medicaid privatization in the early 1970s, entrepreneurs from Miami to Naples to Port Saint Richey have used everything from supermarket gift cards to opioids to lure the poor and unsuspecting onto the rolls of unscrupulous health maintenance or “accountable care” organizations and their affiliated insurance companies. The Fiorella agency’s innovation was that it specialized in selling Obamacare, the individual insurance plans designed for self-employed professionals, very small businesses, and others who’d had trouble obtaining health insurance before the new shopping “marketplaces.”
As the Affordable Care Act’s legacy has been tarnished by the protracted orgy of corporate consolidation and financialization that followed its passage—to say nothing of surging costs and plunging life expectancies—the fact that hemophiliacs and parents of children with muscular dystrophy maintain the right to buy health insurance instead of living in constant fear of bankrupting their employers or getting kicked off the rolls remains a relatively unalloyed achievement of an otherwise terrible law/presidency. Or at least, I thought it did.
But doesn’t the “right” to buy health insurance lose a bit of its luster if said insurance costs $3,700 a month for a family of four, as it will next year in Vermont, West Virginia, and Alaska for families of four with household incomes greater than $128,000? Across the border in Canada, citizens pay just over $9,100 per person per year to fund their whole damned national health system; in 2025, American taxpayers paid $11,352 per person per year to subsidize the private insurance policies of Vermont’s ACA enrollees, who themselves pay an additional $11,000 per year per household just to cover their premiums, to say nothing of co-pays and deductibles.
Luckily, Vermont has just over 30,000 residents on Obamacare. While the predicament of those people is certainly appalling, and we will explore it in more depth later, it does not exactly exemplify the broader rot here.
Between 2020 and 2025, the annual bill for subsidizing the ACA marketplace nearly tripled in size.
Florida, by contrast, has close to five million residents on Obamacare. When the Fiorella bosses, namely COO Cory Lloyd, started to ramp up the brokerage’s ACA sales effort back in 2018, that number was just over 1.4 million. Together with Texas (where Lloyd’s chief alleged co-conspirator Steve Strong lived) and Georgia (where Rep. Marjorie Taylor Greene has been the lone MAGA Republican to express alarm over the impending rate hikes), Florida was the driving force behind the explosion in Obamacare enrollment that has brought us to this terrifying fiscal cliff that now threatens to leave millions of Americans totally bereft of health care whatsoever.
Between 2020 and 2025, the annual bill for subsidizing the ACA marketplace nearly tripled in size, from $53 billion to more than $143 billion. Some of that is because of the enhanced subsidies that actually made the Affordable Care Act affordable, at least as far as insurance premiums go. But much of it may be attributable to the type of schemes with which Lloyd, Strong, and former Fiorella broker Dafud Iza, who pled guilty to the fraud last spring, were involved. While prosecutors allege that the Fiorella enterprise resulted in the payment of just $162 million in fraudulent subsidies over four years, their story suggests they were part of something much bigger and more systemic.
FIORELLA WAS FOUNDED IN 1988 and was primarily known for most of its existence as a broker of Blue Cross policies. But when Cory Lloyd, a childhood friend of the founder’s son Nick Fiorella, was named chief operating officer in 2016, the company appears to have begun more aggressively pushing the proverbial envelope. Between 2018 and 2024, the agency was the defendant in 16 separate federal lawsuits for violating telemarketing laws by repeatedly robocalling and text spamming people, even after they had specifically asked the agency to stop, reported the activity to the state attorney general and the Federal Communications Commission, and/or added their names to the federal Do Not Call registry. On the local Facebook page Martin County Watchdog, at least half a dozen former employees have commented over the past month on the company’s abusive management style and “shady” practices, and one former agent alleged in a 2018 lawsuit and a writ of mandamus filed earlier this year that a human resources manager had openly sold oxycodone tablets to agents on the floor of the call center.
Then came Centene. While companies like UnitedHealth and Aetna were exiting ACA marketplaces to focus on the cash cow that was Medicare Advantage, the St. Louis-based managed care empire was milking Medicaid expansion to turn itself into a low-income health care powerhouse. Centene was playing the role of UnitedHealth for folks too powerless and disenfranchised to turn it into a poster child for all that ails us. Centene’s core business is administering Medicaid benefits on behalf of states, a business it ruthlessly protects by, among other things, retaining private investigators to dig up dirt on public officials charged with maintaining those contracts.
But Centene also sells an ACA marketplace plan known in most states as Ambetter that is notorious among physicians and patients alike for advertising unaffiliated providers as “in network”, then exploiting the No Surprises Act (which was intended to crack down on these “out of network” billing games, but which has enabled insurance companies to negotiate sweetheart deals for themselves) to skip out on bills. With 5.8 million members in 29 states—nearly a quarter of the nation’s Obamacare enrollment—Centene is by far the biggest ACA insurer in America, and as with the country most of its growth has been concentrated in Texas, Georgia, and Florida, where the company donated $10 million to a nonprofit run by first lady Casey DeSantis in 2021 as part of a pharmacy benefit management fraud settlement.
What exactly Ambetter insures is not entirely clear: Reviews on Google, where it boasts a 1.4 star rating, are a sea of wrenching claim denial stories, and while it asserted spending 82.3 percent of its Florida premium revenues on care (as per compliance with the ACA’s perfunctory limits on insurer profit margins), Centene has also owned one of Florida’s biggest primary care practices, the Miami-based Community Medical Group, since 2018. In September, the clinic held an elaborately choreographed Top Gun–themed soiree at a Miami hotel specifically for “brokers,” suggesting some of the funds supposedly earmarked for MRIs and medicine could be feeding the massive Obamacare sales machine.
Also in 2021, of course, the American Rescue Plan showered enhanced tax credits on the ACA marketplace that critically expanded the pool of households that qualified for the subsidies beyond the original limit of 400 percent of the federal poverty line (FPL). This change caused an immediate spike in the Obamacare enrollment at the higher end of the income spectrum, which immediately added nearly 700,000 members above 400 percent FPL in the year after the legislation passed. These are the households whose surging premiums are generating the scariest headlines right now.
But the enhanced subsidies on the bottom end of the income spectrum also accelerated a lower-key shift that had already been under way in Obamacare, toward zero- or ultralow-premium “bronze” plans marketed by outfits like Ambetter that come with $100 in-network co-pays and household deductibles approaching $20,000. About 1 in 5 Obamacare enrollees chose a bronze plan in 2015; by 2022, more than a third of marketplace members had bronze policies. The targets for those policies also changed dramatically: Latinos comprised well under 20 percent of Obamacare members in 2021, and 25.6 percent by 2022. At the same time, the median premium for Latinos enrolled in the program plummeted, from $45 in 2021 to $19 in 2022.
Behind these changes were outfits like Fiorella, which according to the indictment systematically recruited homeless and otherwise “vulnerable, low-income persons” and coached them into lying their way into ACA insurance plans. Using a “street marketing” firm set up by Steven Strong, who moved from South Florida to Texas while the scheme was under way, the Obamacare bounty hunters scoured “homeless shelters, bus stops, clinics, and similar locations” promising “cash, gift cards, food, and alcohol” to anyone willing to be “coached” into signing up for a subsidized ACA plan, according to the indictment. Often this involved convincing the vulnerable person to either get himself kicked off the Medicaid rolls or denied coverage by making some statement or mistake that they understood would automatically trigger a denial from administrators, then using that denial to take advantage of a “special enrollment period” offered to customers experiencing “loss of coverage” events, at which point the person would then be instructed to lie about their income prospects such that the insurance company would believe they “would attempt to make the minimum income necessary” to qualify for the ACA credits, which apparently enabled them to sidestep or kick the can on income verification requests. To achieve all this, they also provided their recruits with fake addresses and Social Security numbers, the indictment states.
Enhanced subsidies accelerated a shift toward zero- or ultralow-premium “bronze” plans.
The scheme brilliantly played into the political agendas of two bitterly opposing factions. Red states were temporarily barred by COVID-19 provisions from pruning their Medicaid rolls in response to temporary income spikes as they had in normal times, and conservative administrators were more than ready to purge anyone who would go through the trouble. Meanwhile, liberals looked at booming Obamacare rolls in big Sun Belt states as a backdoor Medicaid expansion.
It was also cheered on by private equity. In 2021, an Orlando-based outfit called AssuredPartners owned by the Chicago private equity giant GTCR—whose co-founder and former Illinois governor Bruce Rauner had moved to Florida after losing the 2018 election, and become a major backer of Ron DeSantis—scooped up the Fiorella agency, in one of 22 acquisitions it made that year and more than 150 it made over the course of its existence; GTCR sold the firm over the summer to the insurance giant Arthur J. Gallagher & Co. for an astonishing $13.45 billion. AssuredPartners stated that Fiorella was generating an annual $33 million in commissions at the time of its sale; the indictment states that Fiorella and AssuredPartners in turn paid Strong’s “street marketing” enterprise $6,516,457.15 in fees for its fraudulent customer referrals.
“They on the right path to becoming our next U.S senators,” a neighbor posted on the Martin County Watchdog Facebook page in response to a post on the indictment. A second mentioned that the company had “scammed” her years ago into paying for “an extra policy”; and a third said she too had recently learned from her own insurance company that an unscrupulous agent she didn’t know had enrolled her in Obamacare without her knowledge. That turned out to be a full-blown epidemic: In the first eight months of last year alone, the Centers for Medicare & Medicaid Services received 208,000 separate complaints from individuals who had been fraudulently kicked off their insurance rolls and enrolled in ACA programs.
Diane Clark, a paralegal and former real estate professional who spent ten weeks working for Fiorella in 2017, alleged in a 2018 lawsuit that she was fired four days after she was scheduled to receive her first commission check, after complaining that co-workers who were unlicensed to sell insurance were using her license number to sell policies to people who didn’t qualify for them. She said her supervisors further instructed those co-workers to “refuse to ask essential questions” and “input false and misleading information on insurance applications.” Then, after she was fired in December 2017, unknown individuals continued to use her license number to sell insurance policies, according to a document Clark filed earlier this year asking the judge to reopen her case; Mutual of Omaha alone mailed her with “more than 50 receipts … which reflect sales of health insurance policies that had resulted in commissions for sales” she had not made, which were in turn deposited in a Green Dot bank account opened in her name using her license number the month after she had left. The judge ultimately dismissed the case when Clark, who could not afford to pay a lawyer, failed to file an amended complaint with more specific allegations. Reached at her current home near Tallahassee, Clark blamed law enforcement authorities for failing to follow up on what she considered unambiguous evidence of a criminal conspiracy. “These people took away my ability to earn a living,” she said of her bosses at Fiorella.
Democrats have all but ignored stories like the Fiorella Insurance tale, because right-wing think tanks have amplified them to justify ending the subsidies in mendacious screeds like this City Journal essay, which absurdly contends that scamming people into high-deductible Obamacare plans has “dwarfed prior opportunities for fraud.” Uh, no: Medicare and its evil neoliberal doppelganger Medicare Advantage decisively dwarf even the artificially inflated, grift-fortified post-2021 Obamacare subsidies by a factor of eight. And practically since the passage of the updated False Claims Act in 1986, Republicans not named “Chuck Grassley” have labored to legally institutionalize that fraud in our health care system, starting with Bill Barr’s 1988 memo arguing that rewarding whistleblowers who reveal fraud against taxpayers defies the Constitution, accelerating with Rick Scott’s political career, and manifesting most recently in the lengthy list of Florida Medicare fraudsters, from Miami Beach elder abuse kingpin-turned-domestic abuser Philip Esformes to Miami “patient recruiter” Lawrence Duran, who have been granted some form of clemency by President Trump himself.
But the fact is, for the majority of Democrats who support Medicare for All, and who suspected back in 2009 that just as “blanketing a bunch of big companies in government cash” isn’t a particularly logical way to build affordable housing, nor was it a sensible (or moral) way to create affordable health care. As serious Dems ponder the task of rebuilding the institutions Trump fed into the woodchipper, the harrowing subsidy cliff, and the orgy of grift that preceded it, should serve to remind them that the legacy of Obamacare is little more than an object lesson in how not to do it.
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