Dive Brief:
- A yearlong probe by the House Committee on Energy and Commerce into bare-bones insurance plans encouraged by the Trump administration found widespread discrimination against people with pre-existing conditions, even as a growing number are enrolled.
- Top congressional Democrats investigated eight insurers selling short-term, limited duration plans, finding they all denied medical care claims if they found a consumer had a pre-existing condition. Some refused to pay for medical claims for no discernable reason, processing them only after consumers sued or complained to state regulators. Most rescinded coverage if they determined a member had a pre-existing condition or developed one later.
- An HHS spokesperson defended the coverage as an affordable option to pricier Affordable Care Act plans, telling Healthcare Dive, “We’ve been abundantly clear that these plans aren’t for everyone.” America’s Health Insurance Plans made similar points, with spokesperson David Allen noting: “For Americans with pre-existing conditions, they may not be protected at all.”
Dive Insight:
The investigation looked at 14 companies that sell or market the plans, including eight insurers such as market giants Anthem and UnitedHealth Group, and six brokers.
It found insurers frequently turned down consumers with pre-existing conditions and discriminated against women, turning down applicants who were pregnant or planning to become pregnant and charging women more than men for the same coverage.
The plans had significant coverage limitations. Some excluded routine care like basic preventive visits and pelvic exams. Some plans had hard coverage cutoffs that left consumers with massive medical bills.
In one case, a consumer was billed a whopping $280,000 and lost coverage after being treated for an infection. The insurer said the patient previously had gotten an ultrasound that was “suspicious for deep venous thrombosis.”
AHIP spokesman Allen said it is not surprising given the plans are not intended to replace comprehensive coverage.
“They often do not cover the care and treatments that patients need throughout the year — preventive care, prescription drugs, mental health care or treatments for chronic health conditions — or if they do, they may limit or cap the benefits,” he acknowledged.
On average, short-term plans spend less than half of premium dollars collected from consumers on medical care: only 48%, the investigation found. That’s in stark contrast to plans in the ACA’s individual market, which are required to shell out at least 80% of all premium dollars on claims and benefits.
Short-term insurance represents a significant and growing share of the individual healthcare market. Roughly 3 million consumers bought the plans in 2019, a 27% growth from 2018, the investigation launched in March last year found.
The growth came after the Trump administration, in a controversial move, extended the maximum duration of the plans. The skimpy coverage, which isn’t required to cover the 10 essential benefits under the ACA, was originally designed as cheap safety net coverage for three months.
But in August 2018, HHS expanded the plans to 12 months, with a three year renewal period, and opened them up to all consumers, not just for those who can’t afford other coverage.
ACA supporters and patient advocates blasted the move, which sparked an ongoing legal challenge from safety net providers. Reports of consumers purchasing the coverage, believing it was comprehensive, then being shocked by balance bills prompted the House investigation.
The report also found brokers are paid up to 10 times more compensation for peddling short-term plans than ACA-compliant coverage. The average commission rate for short-term plans compared to ACA plans was 23% versus 2%, respectively.
Currently, 24 states ban or restrict the sale of short-term plans. Some states, including California, Massachusetts, New Jersey and New York, prohibit their sale entirely, while others like Colorado, Connecticut, New Mexico and Rhode Island have such strict regulations that no plans are sold.
Democratic leaders unveiled a bill on Wednesday to bolster the ACA and rescind the administration’s expansion of the plans and expand subsidies, allowing more people to qualify for coverage.
The effort has zero chance of moving this year with Republicans in control of the Senate, but both it and the probe are likely to play into the looming 2020 presidential and congressional elections.
“The heavy-handed tactics uncovered in this investigation demonstrate why Congress must reverse the Trump Administration’s expansion of these junk plans,” E&C Chairman Frank Pallone, D-N.J., Health Subcommittee Chairwoman Anna Eshoo, D-Calif., and Oversight and Investigations Subcommittee Chair Diana DeGette, D-Colo., wrote in a joint statement. “It also shows how dangerous a post-ACA world would be if Republican Attorneys General and the Trump Administration are successful in striking down the law and its protections.”
That lawsuit, led by 18 red states, argues the ACA, which expanded insurance to some 20 million people, is unconstitutional because a tax bill passed in 2017 zeroed out the penalty for its individual mandate. It’s currently pending before the U.S. Supreme Court.
President Donald Trump and his health officials have repeatedly promised people with pre-existing conditions will be protected if the ACA is struck down, but neither the administration nor Republicans in Congress have said specifically how.
HENRY KOTULA 