California accuses healthcare sharing ministry of misleading consumers

https://www.healthcaredive.com/news/california-accuses-healthcare-sharing-ministry-of-misleading-consumers/573900/

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Dive Brief:

  • The California Department of Insurance issued a cease and desist order to a major Christian group Wednesday for misleading consumers about their health insurance plans and acting as a payer without proper certification, joining a handful of other states scrutinizing the limited coverage.
  • Deceptive marketing by Aliera Healthcare, which sells health ministry plans, and Trinity, which runs them, led to roughly 11,000 Californians belonging to the unapproved “lookalike” plans that don’t cover pre-existing conditions and other required benefits, with no guarantees their claims will be paid, the state’s insurance regulator said.
  • Healthcare sharing ministries (HCSMs) are organizations where members share a common set of religious or ethical beliefs and agree to share the medical expenses of other members. They’re increasingly controversial, as policy experts worry the low-cost insurance attracts healthier individuals from the broader insurance market, creating smaller and sicker risk pools in plans compliant with the Affordable Care Act.

Dive Insight:

Aliera, founded in 2011 and based in Georgia, and Trinity allegedly trained sales agents to promote misleading advertisements to consumers, peddling products that don’t cover pre-existing conditions, abortion, or contraception. The shoddy coverage also doesn’t comply with the federal Mental Health Parity and Addiction Equity Act and the ACA.

The deceptive advertising could have pressured some Californians to buy a health sharing ministry plan because they believed they missed the deadline for buying coverage through Covered California, the state’s official insurance marketplace.

“Consumers should know they may be able to get comprehensive coverage through Covered California that will protect their health care rights,” California Insurance Commissioner Ricardo Lara said in a statement.

HCSMs, which began cropping up more than two decades ago as a low-cost alternative approach to managing growing medical costs, operate either by matching members with those who need help paying medical bills or sharing costs on a voluntary basis. They’re often cheaper than traditional insurance, but they don’t guarantee payment of claims, rarely have provider networks, provide limited benefits and usually cap payments, which can saddle beneficiaries with unexpected bills.

About 1 million Americans have joined the groups, according to the Alliance of Health Care Sharing Ministries.

At least 30 states have exempted HCSMs from state regulation, according to the Commonwealth Fund, meaning the ministries don’t have to comply with health insurance requirements. California does not exempt the religious-based groups from the state insurance code.

In January, Aliera and its subsidiaries, which includes Trinity, were banned from marketing HCSMs in Colorado after being accused of acting as an unlicensed insurer. One month later, Maryland issued a revocation order against Aliera for trying to sell an unauthorized plan in the state. Earlier this month, Connecticut issued a cease and desist order for conducting an insurance business illegally.

Aliera argues states are limiting the choices available to consumers, telling Healthcare Dive it was “deeply disappointing to see state regulators working to deny residents access to more affordable programs.”

“We will utilize all available opportunities to address the false claims being made about the support and management services we provide to Trinity HealthShare and other health care ministries we represent,” Aliera said.

However, Aliera and Trinity don’t meet the Internal Revenue Code’s definition of a health sharing ministry, according to California’s cease and desist, meaning their beneficiaries don’t meet California’s state individual insurance mandate.

The state can impose a fine of up to $5,000 a day for each day the two continue to do business, along with other financial penalties.