Covered California, the California health exchange, is coming clean about violating the privacy of thousands of its customers. According to the Los Angeles Times, the exchange confessed it has shared personal information about the customers with insurance agents without the customers’ permission. The ostensible reason was that the exchange has a pilot program with a December 23 deadline to have customers enroll in the exchange.
The customers who had their privacy violated were searching online for different insurance options, but did not give permission for insurance agents to contact them personally. Covered California supplied the insurance agents with the customers’ names, addresses, phone numbers and email addresses, even those customers who didn’t finish completing the insurance application on the website.
Covered California had no estimate of the number of customers affected. Even the insurance agents were disturbed; Sam Smith, president of the California Association of Health Underwriters,, said, “I’m shocked and dumbfounded. These people would have a legitimate complaint,” said Smith, who added he had been given two consumer names.
One customer, Robert Blatt, a technology consultant in Ventura County, after being contacted by an insurance agent, commented, “You can’t do this. For a government agency to release this information to an outside person is a major issue.”
Peter Lee, executive director of Covered California, admitted to the Los Angeles Times that customers did not ask or give permission for their names and contact information to be dispensed, but argued the practice was still legal, saying, “I can imagine some people may be upset. But I can see a lot of people will be comforted and relieved at getting the help they need to navigate a confusing process.”