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protectourcare
In News, Fact Sheet

Reminder: Association Health Plans Have Long History Of Fraud And Unpaid Claims

The fact of the matter is simple: association health plans (AHPs) are not required to cover the essential health benefits put in place by the Affordable Care Act and are allowed to charge people more based on their age, health status, and gender. This means that while AHPs are required to cover people with pre-existing conditions, they can refuse to cover any treatment associated with a pre-existing condition. Because these plans lack consumer protections, plans that do cover essential health benefits could scale back coverage at some point, and consumers wouldn’t know until it was too late. Fundamentally, association health plans open the door to coverage that is not comprehensive and have a long, well-documented history of fraud and abuse.

ASSOCIATION HEALTH PLANS HAVE A HISTORY OF FRAUD AND UNPAID CLAIMS

Former Insurance Fraud Investigator: “Fraudulent Association Health Plans Have Left Hundreds Of Thousands Of People With Unpaid Claims.” “Marc I. Machiz, who investigated insurance fraud as a Labor Department lawyer for more than 20 years, said the executive order was ‘summoning back demons from the deep.’ ‘Fraudulent association health plans have left hundreds of thousands of people with unpaid claims,’ he said. ‘They operate in a regulatory never-never land between the Department of Labor and state insurance regulators.’” [New York Times, 10/21/17]

Between 2000 and 2002, AHPs Left 200,000 Policyholders with $252 Million In Unpaid Medical Bills. “There have been several documented cycles of large-scale scams. According to the GAO, between 1988 and 1991, multiple employer entities left 400,000 people with medical bills exceeding $123 million. The most recent cycle was between 2000 and 2002, as 144 entities left 200,000 policyholders with $252 million in unpaid medical bills.” [United Hospital Fund, 3/6/18]

[GAO, February 2004]

2017: Labor Department Filed A Suit Against An AHP For 300 Employers In Washington State Alleging The AHP Had Charged Employers More Than $3 Million In Excessive Fees And Violating Its Fiduciary Duty By Using Assets For Personal Interests. “The problems are described in dozens of court cases and enforcement actions taken over more than a decade by federal and state officials who regulate the type of plans Mr. Trump is encouraging, known as association health plans. In many cases, the Labor Department said, it has targeted ‘unscrupulous promoters who sell the promise of inexpensive health benefit insurance, but default on their obligations.’ In several cases, it has found that people managing these health plans diverted premiums to their personal use. The department filed suit this year against an association health plan for 300 small employers in Washington State, asserting that its officers had mismanaged the plan’s assets and charged employers more than $3 million in excessive ‘administrative fees.’ Operators of the health plan violated their fiduciary duty by using its assets ‘in their own interest,’ rather than for the benefit of workers, the government said.” [New York Times, 10/21/17]

2016: A Labor Department Lawsuit Revealed An AHP Had Concealed Financial Problems And Left $3.6 Million In Unpaid Claims. “The Labor Department filed suit last year against a Florida woman and her company to recover $1.2 million that it said had been improperly diverted from a health plan serving dozens of employers. The defendants concealed the plan’s financial problems from plan participants and left more than $3.6 million in unpaid claims, the department said in court papers.” [New York Times, 10/21/17]

A Health Plan For New Jersey Small Businesses Collapsed With $7 Million In Unpaid Claims. “In another case, a federal appeals court found that a health plan for small businesses in New Jersey was ‘aggressively marketed but inadequately funded.’ The plan collapsed with more than $7 million in unpaid claims.” [New York Times, 10/21/17]

In Florida, A Man Pleaded Guilty To Embezzling $700,000 In Premiums From An AHP To Help Build A Home For Himself And Was Sentenced To 57 Months In Prison. “A Florida man was sentenced to 57 months in prison after he pleaded guilty to embezzling about $700,000 in premiums from a health plan that he had marketed to small businesses. The Labor Department and the Justice Department said he had used some of the plan premiums to build a home for himself.” [New York Times, 10/21/17]

In South Carolina, A Man Pleaded Guilty To Diverting Nearly $1 Million From An AHP For Churches And Small Businesses, Leaving $1.7 Million In Unpaid Claims. “A South Carolina man pleaded guilty after the government found that he had diverted more than $970,000 in insurance premiums from a health plan for churches and small businesses. ‘His embezzlement and the plan’s consequent failure left behind approximately $1.7 million in unpaid medical claims,’ the Labor Department said.” [New York Times, 10/21/17]

In Louisiana, Two People Pleaded Guilty To Using Money From The AHP For Spa Treatments, Diamond Cuff Links, Foreign Travel And Other Personal Expenses. “And in Louisiana, two people pleaded guilty to conspiracy charges after the government found that they had taken money from the medical benefit fund of a trade association and used it to pay for spa treatments, diamond cuff links, evening gowns, foreign travel and other personal expenses.” [New York Times, 10/21/17]

One AHP Scheme Shows How AHPs Can Move From State To State. Families USA chronicled an AHP scheme involving the American Trade Association, Smart Data Solutions, and Serve America Assurance. They found:

  • “Even after one state identifies a problem, the company may continue to operate for years in other states. North Carolina issued a cease and desist order to stop many of the players in this case from selling insurance in 2008.”
  • “But by June 2010, when Maryland issued a cease and desist order, the plans sold by these players had been identified in at least 23 states.2 „ Estimates of total premiums paid to these companies for unauthorized, unlicensed plans range from $14 million to $100 million.”
  • “This particular scheme operated through associations that went by many different names. (At least one of the players in this case was involved in a previous case concerned with fraudulent insurance sold through an association of employers in 2001-2002.”
  • “Consumers are often ill-protected when they buy coverage through an association, and the web of relationships among salespeople, associations, administrators, and actual insurers can be difficult for regulators to unravel and oversee. Consumers may be encouraged to join fake associations to buy health insurance so they have an illusion of coverage—and the insurers collect membership dues and premiums while illegally avoiding state oversight).” [Families USA, October 2010]

GAO Report In 1992 Showed Similar AHPs Left At Least 398,000 Participants With More Than $123 Million In Unpaid Claims And More Than 600 Plans In Almost Every State Failed To Comply With State Laws. “Back in 1992, the Government Accountability Office issued a scathing report on these multiple employer welfare arrangements (known as MEWAs; they’re pronounced “mee-wahs”) in which small businesses could pool funds to get the lower-cost insurance typically available only to large employers. These MEWAs, said the government, left at least 398,000 participants and their beneficiaries with more than $123 million in unpaid claims between January 1988 and June 1991. Furthermore, states reported massive and widespread problems with MEWAs. More than 600 plans in nearly every U.S. state failed to comply with insurance laws. Thirty-three states said enrollees were sometimes left without health coverage when MEWAs disbanded…’MEWAs have proven to be a source of regulatory confusion, enforcement problems and, in some instances, fraud,’ the GAO wrote at the time.” [Washington Post, 10/12/17]

Kentucky Experiment Showed AHPs Destabilize The Market And Caused Insurers To Leave Individual Market Or Not Sell New Policies Subject To Higher Standards. “In 1994, Kentucky passed a set of health insurance reforms (for the individual and small-group markets) that were very similar to the ACA’s market reforms.  These included a requirement for insurers to accept all applicants regardless of their health status, restrictions on exclusions of pre-existing health conditions, and a requirement that premiums be set without regard to health status, claims experience, or gender.  Premium variations for age, family size, and geographic factors were limited, and plan benefits were standardized. Insurers in the state resisted the reforms and lobbied to repeal parts of it. In 1996, Kentucky’s legislature passed legislation that repealed many of the market reforms.  Crucially, the law exempted associations of employers or individuals from the premium-rating and benefits requirements, a loophole that allowed associations to sell coverage under a much weaker regulatory scheme. In part because healthy individuals could buy association plans, the risk of adverse selection against the reformed individual market increased.  Nearly all insurers left Kentucky’s individual market or declined to sell new policies that were subject to the stronger rating and benefits standards. In 1998, the Kentucky legislature passed a bill that repealed many of the state’s remaining health insurance reforms.” [Center on Budget and Policy Priorities, 11/29/17]

STATE INSURANCE OFFICIALS, EXPERTS HAVE WARNED OF SUCH FRAUD UNDER NEW RULES

As Coalition Urges States To Allow AHPs, State Officials Push Back, Warn Of Fraud. “A coalition of business groups wants to ensure that the states aren’t setting up hurdles that will make it difficult for small employers to participate in group health plans established under a new rule by the U.S. Labor Department… [Pennsylvania Insurance Commissioner Jessica Altman] reminded the DOL before the rule was finalized about the history of fraud among past association health plans. She wasn’t the only official in Pennsylvania to oppose the plans. Attorney General Josh Shapiro also pushed back against the rule, joining 11 other attorneys general in a lawsuit against the DOL and the U.S.” [Bloomberg, 9/11/18]

State Insurance Commissioners Want To Know What Restrictions They Can Put On AHPs. “But given the looming sales of AHPs, state regulators want to know as soon as possible what restrictions they can place on the plans. They fear the Trump administration may argue that state regulation is pre-empted by the federal Employee Retirement Income Security Act, which governs self-insured employer health plans…The states that so far have issued new rules or policy statements limiting AHPs are Democratic-led states. But insurance regulators in both red and blue states are nervous about an expansion of AHPs given the long history of fraud and insolvencies involving these types of plans.” [Modern Healthcare, 8/7/18]

Dr. James Madara, CEO of the American Medical Association: Association Health Plans Have Potential To Threaten Health And Financial Stability. “Fraudsters prey upon areas of regulatory ambiguity and may challenge such authority in courts to further delay enforcement, which allows more time to increase unpaid medical claims…Without proper oversight to account for insolvency and fraud, AHPs have the potential to … (threaten) patients’ health and financial security and the financial stability of physician practices and other providers.” [Modern Healthcare, 3/7/18]

Insurance Commissioners Have Had Difficulty Finding Answers On The Ground About Association HealthPlans.“‘We’re asking questions and finding it very difficult to get answers,’ said Washington state Insurance Commissioner Mike Kreidler.” [Politico, 8/6/18]

ASSOCIATION HEALTH PLANS DON’T HAVE TO OFFER COMPREHENSIVE COVERAGE

Katherine Hempstead, Robert Wood Johnson Foundation: “The Easier You Make It Not To Buy Comprehensive Coverage, The Harder You Make It Buy Comprehensive Coverage.” [New York Times, 10/11/17]

Vox: Association Health Plans Could Allow Groups To Act As Large Employers Which Do Not Have To Cover Essential Benefits Under The ACA. “The result could in many cases be that these new association health plans would be considered large employers when it comes to health insurance. Large employers are not subject to the same rules as individual or small-group plans under Obamacare. Most notably, they do not have to cover all of the law’s essential health benefits or meet the requirement that insurance cover a minimal percentage of a person’s medical bills.” [Vox, 10/12/17]

Treating Association Health Plans Like Large Employers Would Exempt Them From Guaranteeing Essential Health Benefits And Allow Them To Charge People Based On Health Status And Gender. Treating Association Health Plans like large-employers would exempt them from key consumer protections under the Affordable Care Act. Large employers do not have to offer plans with the Essential Health Benefits like maternity care, prescription drug coverage or mental health and substance abuse services. Insurers for large employers can also charge more based on health status and gender. [Georgetown Center on Health Insurance Reforms, December 2017]

Sean England
In Fact Sheet

Junk Plans Ripe For Fraud, Dangerous For Consumers

In August, the Trump administration finalized a rule that expands the availability of short-term coverage, limited-duration plans from three months to just under twelve months and allows them to renew such plans for up to three years. The rule allows insurance companies to skirt vital consumer protections in the Affordable Care Act like protecting people with pre-existing conditions. In other words, the Trump administration has allowed insurance companies to flood the market with junk plans that do not provide the care people need, when they need it. Since finalizing the rule, the Trump administration has urged navigator groups that help people sign up for coverage to push consumers toward junk plans and has issued guidance urging states to let ACA subsidies be used to purchase these skimpy plans.

The fact of the matter is simple, junk plans are a recipe for fraud and leave consumers at risk of bankruptcy when they get sick. Take a look below:

SINCE THE TRUMP ADMINISTRATION’S JUNK PLAN RULE, THESE PLANS HAVE ALREADY ATTRACTED FRAUD, SPURRED CONFUSION FOR CONSUMERS

January 2019 – Georgetown University Health Policy Institute Finds Consumers Searching Online For ACA Compliant Plans Are Often Directed, Instead, To Junk Plans. “Our marketing scan suggests that consumers shopping online for health insurance, including those using search terms such as ‘Obamacare plans’ or ‘ACA enroll,’ will most often be directed to websites and brokers selling STLDI or other non–ACA compliant products. These websites and brokers often fail to provide consumers with the plan information necessary to inform their purchase. Brokers selling STLDI over the phone push consumers to purchase the insurance quickly, without providing written information…Even during ACA open enrollment, only 19 percent of searches using the previously delineated terms returned sites offering solely ACA-compliant plans. Before open enrollment, the return was less than 1 percent. Generally, regardless of the search terms used, companies selling short-term plans dominated the returns. However, short-term plan insurers’ and brokers’ sites appeared more frequently when we searched for ‘short-term health insurance.’” [Georgetown University Health Policy Institute, 1/31/19]

November 2018 – New York Times: Federal Officials Shut Down Sales Of ‘Ruinous’ Health Insurance Plans. “‘There is good cause to believe’ that the Florida companies have sold shoddy coverage by falsely claiming that such policies were comprehensive health insurance or qualified health plans under the Affordable Care Act, Judge Darrin P. Gayles of the Federal District Court in Miami said in a temporary restraining order issued last week at the request of the Federal Trade Commission…The trade commission said the financial consequences of the misrepresentations ‘have been ruinous for consumers, many of whom do not realize’ the limits of the coverage until they incur substantial medical expenses. The commission described Mr. Dorfman as ‘the architect of this scam’ and said he had ‘siphoned millions of dollars of proceeds from defrauded consumers to pay for private jet travel, gambling sprees in Las Vegas, the rent for his oceanfront condominium, luxury automobiles, over $1 million in jewelry, and even the nearly $300,000 cost of his recent wedding at the St. Regis Hotel in Miami.’” [New York Times, 11/5/18]

November 2018 – Federal Trade Commission Condemned One Company’s Junk Plan Scheme As “Classic Bait-and-Switch Scheme Designed To Trick Consumers.” “The members of the trade commission — three Republicans and two Democrats — voted unanimously to take action against the Florida operation, which the commission described as ‘a classic bait-and-switch scheme designed to trick consumers into paying hundreds of dollars for substandard products under the pretense that they are actually receiving comprehensive health insurance.’” [New York Times, 11/5/18]

December 2018 – Short-term Plans, Filled With Confusing Parameters, Only Add To Difficulty During Open Enrollment Season. “The woman arrived at the University of South Florida’s navigator office in Tampa a few weeks ago with a 40-page document describing a short-term health insurance plan she was considering. She was uncomfortable with what the broker had said about the coverage, she told Jodi Ray, a health insurance navigator who helps people enroll in coverage, and she wanted help understanding it. The document was confusing, according to Ray, who oversees Covering Florida, the state’s navigator program. It was hard to decipher which services would be covered. ‘It was like a bunch of puzzle pieces,’ she said. Encouraged by her wife, the woman eventually opted instead for a marketplace plan with comprehensive benefits.” [NBC News, 12/10/18]

JUNK PLANS HAVE A LONG HISTORY OF LEAVING THOSE WHO GET SICK WITH THOUSANDS OF DOLLARS IN UNPAID BILLS

2019 – Stephanie Sena Contracted Sepsis And Needed Amputation — Her Junk Insurance Wouldn’t Pay. “Stephanie Sena was about to have half her foot amputated, an urgent procedure to keep a blood infection from spreading to the rest of her body. But the surgeon required payment up front and the insurance plan that the 39-year-old Villanova University adjunct professor bought months earlier was refusing to pay. She had less than 24 hours to come up with $1,920. Sena’s insurance plan, it turned out, was not real health insurance. It was an accident and sickness hospital indemnity plan that paid a set dollar amount for certain services. This surgery was not on the list. She has since gotten a $1,725 refund for seven months of premiums, after The Inquirer contacted the company, but that will barely put a dent in the $19,000 medical debt she’s accumulated since enrolling in a plan that covers virtually nothing.” [Philadelphia Inquirer, 4/5/19]

2018 – Short Term Plans Deceive Consumers Like Milton Rodriguez, Who Learn Their Plans Don’t Cover Emergency Room Services After Going To The Hospital For Emergency Room Services. “If there was ever a time Rodriguez needed health insurance, this was that time. He called an insurance broker who had reached out to him when he was shopping around for a plan. ‘I called at night and just needed something that would cover me right away,’ Rodriguez said.The broker sent a policy, which Rodriguez approved. He then sent a payment to the insurance company. The broker told him he’d be covered starting at 12 a.m. As soon coverage kicked in, Rodriguez went to the closest hospital, St. David’s in South Austin. It turned out he had appendicitis. While he was waiting for a bed in the ER, hospital staff took his insurance information. He had surgery and was sent home to recover. Rodriguez started getting phone calls from doctors and the hospital asking about his insurance plan. ‘And then the next thing I know is, I get my bills in the mail and it seems like the most important part – which was the emergency room, everything that happened within the emergency room – none of that was covered,’ he said. His bill: $62,620. At the bottom of that bill, there was a code explaining why coverage wasn’t applied: ‘This policy does not provide benefits for services provided in the emergency room.’” [KUT, 10/31/18]

2017 – Under Short-Term Plan, Insurance Company Was Able To Cancel Jeanne Balvin’s Insurance When She Got Sick, Leaving Her With $97,000 In Hospital Bills. “When Jeanne Balvin had emergency surgery for diverticulitis in June 2017, her short-term health insurance plan—a policy she bought instead of more comprehensive insurance—covered most of the bills after she paid a $2,500 deductible. But when she landed back in the hospital with an abdominal infection a few weeks later, she says her insurance company, UnitedHealthcare, wouldn’t cover the charges—and then canceled the three-month policy she had just renewed. UnitedHealthcare said the infection was a pre-existing condition related to the diverticulitis and wouldn’t be covered under terms of the contract. And when Balvin, 61, was hospitalized a third time at the end of July—this time for a blood clot probably caused by inactivity following the hospitalizations—she had no insurance at all, leaving her with $97,000 in hospital bills.” [Consumer Reports, 10/2/18]

2014 – Atlanta Woman With Short-Term Plan Was Diagnosed With Cancer And Left With $400,000 Medical Bill. “Dawn Jones…bought a short-term plan from Golden Rule Insurance, a unit of UnitedHealth Group Inc., so she’d be covered between jobs, according to court documents. Then, she was diagnosed with breast cancer. Despite showing evidence she was unaware of the cancer when she bought the policy, the insurer didn’t pay for Jones’s treatment, leaving her with a $400,000 medical bill, according to a complaint she filed against the company in September 2016… the judge sided with Golden Rule and dismissed the case in August, finding the policy agreement clearly stated that preexisting conditions wouldn’t be covered, even if the customer was unaware of the condition. Jones wasn’t diagnosed until after she bought her policy.” [Bloomberg, 10/17/17]

2014 – Short-Term Insurance Plan Refuses To Pay For Man’s Triple Bypass Surgery, Leaving Family With $900,000 In Bills. “One case pending in federal court involves Kevin Conroy, who had a heart attack in 2014 and underwent triple bypass surgery, just two months after his wife, Linda, obtained a short-term policy over the telephone. Their insurer, HHC Life, refused to pay the bills. ‘We freaked out,’ Ms. Conroy said. ‘What were we going to do? It was $900,000.’ The insurer informed the Conroys the policy was ‘rescinded,’ to use the industry jargon. “[New York Times, 11/30/17]

2013 – In San Francisco, Woman Was Hit With $150,000 Charge After Short-Term Health Plan Refused Coverage. “Grace Wood, an instructor at a university in San Francisco, bought a short-term plan in 2013. When she had to have a heart procedure, her insurer, HCC Life, balked, leaving her with roughly $150,000 in unpaid medical bills.” [New York Times, 11/30/17]

2008 – San Antonio Man Paid Premiums To Short-Term Plan Company For Six Years, And Was Denied Coverage When He Developed Kidney Disease. “Pat’s decision to save some money by buying short-term insurance was a big mistake, says Karen Pollitz, project director of Georgetown University’s Health Policy Institute and a leading expert on the individual-insurance market. ‘These short-term policies are a joke,’ she says. ‘Nobody should ever buy them. It is false security that is being sold. It’s junk.’ That’s because diagnosing and treating an illness may not fall neatly into six-month increments. While Pat had been continuously covered since 2002 by the same company, Assurant Health, each successive policy treated him as a brand-new customer. In looking back over Pat’s medical records, the company noticed test results from December, eight months earlier. Though Pat’s doctors didn’t determine the precise cause of the problem until the following July, his kidney disease was nonetheless judged a ‘pre-existing condition’ — meaning his insurance wouldn’t cover it, since he was now under a different six-month policy from the one he had when he got those first tests…A paradox of medical costs is that people who can least afford them–the uninsured–end up being charged the most. Insurance companies, with large numbers of customers, have the financial muscle to negotiate low rates from health-care providers; individuals do not. Whereas insured patients would have been charged about $900 by the hospital that performed Pat’s biopsy (and pay only a small fraction of that out of their own pocket), Pat’s bill was $7,756. For lab work–and there was a lot of it–he was being charged as much as six times the price an insurance company would pay. One pathology lab’s bill alone was $3,290.” [Time, 3/5/09]

2002 – Heather Kofke-Egger’s Experience With Short-term Plans Demonstrates How Junk Plans Can Leave Customers Behind When They Need Support The Most. “Heather Kofke-Egger knows first-hand the risks of depending on a plan with skimpy benefits. Just out of college in 2002, she could pay $450 a month for a health plan offered to new graduates, or $85 a month for a short-term plan. ‘I knew I was taking a risk,’ she said. ‘Plans didn’t cover pre-existing conditions, but without a job lined up, I had no way to pay the [higher] premiums.’…Diagnosed with depression in college, Kofke-Egger was doing well upon graduation. She filled a 90-day supply of antidepressants before leaving school and hoped to have a job with health insurance by the time she needed a refill…Without a prescription drug benefit, Kofke-Egger was paying more than $600 a month for medication and therapy. ‘About half my gross pay went to medical care,’ she said. ‘I was struggling to get myself to work each day.’ Short-duration plans give you a feeling of safety, Kofke-Egger said, but not a full understanding of the lack of protections. ‘You have to read the fine print really carefully,’ she said. Young people may be especially vulnerable.”  [CNBC, 10/7/18]

KEY INSURANCE STAKEHOLDERS AGREE: JUNK PLANS ARE RIPE FOR ABUSE, OFTEN SOLD IN MISLEADING WAY

Georgetown Center On Health Insurance Reforms: As Bills Start To Pile Up Under Short-Term Plans, Many Folks Would Realize “They’re Not Really Insured At All.” “If you are pregnant, you will have to find another way to pay for the cost of your pre-natal care and labor and delivery (maternity care charges for a normal birth average $32,093; $51,125 for an uncomplicated C-section). If you get cancer, your plan will not cover oncology drugs, which can cost an average of $10,000 per month. If you are hospitalized, you may find yourself owing hundreds of thousands of dollars for services that are not covered by your plan.” [Georgetown Center On Health Insurance Reforms, 7/26/18]

State Insurance Regulators Express Concern That Short-Term Plans Are Being Marketed To Consumers In Misleading Way. “State insurance regulators, gathered over the past three days for a meeting of the National Association of Insurance Commissioners, expressed deep concern that short-term plans were being aggressively marketed in ways likely to mislead consumers. Many said the plans, which need not comply with the Affordable Care Act’s coverage mandates, were a poor substitute for comprehensive insurance.” [New York Times, 8/6/18]

North Dakota Insurance Commissioner: There Are Plenty Of “Bad Actors” Selling Short-term Plans That Are “Looking To Take Advantage Of Consumers.” “There are plenty of good actors in the marketplace who are reputable and will offer these products appropriately, but there are also many bad actors that are looking to take advantage of consumers as they explore their health insurance options.” [Bismarck Tribune, 9/19/18]

Troy Oechsner, Deputy Superintendent At New York Department Of Financial Services: “These Are Substandard Products.” “‘These are substandard products,’ sold on the premise that ‘junk insurance is better than nothing’ for people who cannot afford comprehensive coverage, Troy J. Oechsner, a deputy superintendent at the New York Department of Financial Services, told the insurers.” [New York Times, 8/6/18]

National Association of Insurance Commissioners Report Confirms That With Short-Term Plans, A Significantly Higher Percentage Of Money Goes Toward Administrative Costs And Profits Than Care. The NAIC report reveals that the largest seller of short-term plans, UnitedHealth, has a medical loss ratio, the ratio of money that goes toward care versus administrative costs and profits, of 43.7 percent, compared to the ACA-mandated minimum of 80 percent. [NAIC, July 2018]

98 Percent Of Health Groups That Submitted Comments To HHS Have Serious Concerns About The Short-Term Proposal.  “More than 98% — or 335 of 340 — of the healthcare groups that commented on the proposal to loosen restrictions on short-term health plans criticized it, in many cases warning that the rule could gravely hurt sick patients.” [Los Angeles Times, 5/30/18]

ashoup
In News, Fact Sheet

NEW REPORT – Defined by Health Care: Election 2018

New Report from Protect Our Care Finds that Health Care is the Most Important Issue for Voters in the 2018 Election Cycle

Washington, DC – In a new report released today, Protect Our Care analyzes polling, public data, advertising spending, candidate statements and more to confirm that health care is is the most important issue for voters in the 2018 election cycle. Health care is the defining issue of this campaign, leading American families to reject Republicans after they have worked to rip away protections for pre-existing conditions, repeal health care, and raise costs, especially for older Americans.

“November’s election will be a health care referendum,” said Leslie Dach, chair of Protect Our Care. “Whether you look at public opinion polling, ad spending or the Republican politicians spinning their wheels trying to rebrand themselves as health care heroes, mounting evidence suggests that when voters head to the polls this November, they will be voting on health care. Health care packs a devastating one-two punch for Republicans — it is both the top issue for voters and the issue where Democrats hold the largest trust advantage over Republicans.”

Protect Our Care’s report, Defined By Health Care: Election 2018, synthesizes all the evidence that health care is the issue in 2018. Among the findings: Health Care is a top Google search in 75 percent of Congressional Districts ; national and district-specific polling of voters confirms health care is the top issue heading into November, and public opinion is decidedly against the Republican repeal-and-sabotage agenda; fifty percent of Democratic ad spending is on health care according to the Wesleyan Media Project, and up and down the ballot, Republicans are breathlessly working to reinvent their records on health care with outright lies.

“Republicans only have themselves and their repeal-and-sabotage agenda to blame for keeping health care a constant, top-of-mind issue for voters,” said Brad Woodhouse, executive director of Protect Our Care. “The Republican health care agenda boils down to this: you pay more for coverage and lose protections that you depend on, but wealthy insurance and drug companies get record tax breaks. It’s deeply unpopular and will cost them this November.”

Protect Our Care unveiled the new report after a press call with leading Democratic pollster Geoff Garin and U.S. Senator Maggie Hassan.

“Health care is the dominant issue in the election because it’s the number one pocketbook issue for voters today,” said Geoff Garin, president of Hart Research. “Importantly, health care and affordable health care is not only the number one issue for people who intend to vote Democratic, but it is also frequently cited by independents and those critical undecided voters.”

“It couldn’t be clearer to me that health care is the number one issue on voters’ minds right now — I hear about it everywhere I go,” said U.S. Senator Maggie Hassan, a health care champion who defeated a pro-repeal incumbent in the 2016 election. “Voters really see the stark contrast between Republicans and Democrats on the issue. They know their lives and their livelihoods are at stake, and they’re going to vote like it.”

Read the full report from Protect Our Care here.

ashoup
In News, Fact Sheet

Short-Term Junk Plans

SHORT-TERM JUNK PLANS OFFER INADEQUATE MEDICAL COVERAGE AND CIRCUMVENT FUNDAMENTAL CONSUMER PROTECTIONS

Short-Term Plans May Exclude Coverage For Pre-Existing Conditions. “Policyholders who get sick may be investigated by the insurer to determine whether the newly-diagnosed condition could be considered pre-existing and so excluded from coverage.” [Kaiser Family Foundation, 2/9/18]

  • As Many As 130 Million Nonelderly Americans Have A Pre-Existing Condition. [Center for American Progress, 4/5/17]
  • 1 in 4 Children Would Be Impacted If Insurance Companies Could Deny Or Charge More Because Of A Pre-Existing Condition. [Center for American Progress, 4/5/17]

Short-Term Junk Plans Can Refuse To Cover Essential Health Benefits. “Typical short-term policies do not cover maternity care, prescription drugs, mental health care, preventive care, and other essential benefits, and may limit coverage in other ways.” [Kaiser Family Foundation, 2/9/18]

Under Many Short-Term Junk Plans, Benefits Are Capped At $1 Million Or Less. Short-term plans can impose lifetime and annual limits –  “for example, many policies cap covered benefits at $1 million or less.” [Kaiser Family Foundation, 2/9/18]

Commonwealth Fund: “Cost Sharing Designs In Short-Term Coverage Leave Members Facing Major, Unpredictable Financial Risk.” “The out-of-pocket maximum for each best-selling plan is higher than that allowed in individual or employer plans under the ACA, when adjusting for the shorter plan duration. When considering the deductible, the best-selling plans have out-of-pocket maximums ranging from $7,000 to $20,000 for just three months of coverage. In comparison, the ACA limits out-of-pocket maximums to $7,150 for the entire year.” [Commonwealth Fund, 8/11/17]

Short-Term Junk Plans Can Retroactively Cancel Coverage After Patients File Claims. “Individuals in STLDI plans would be at risk for rescission. Rescissions are retroactive cancellations of coverage, often occurring after individuals file claims due to medical necessity. While enrollees in ACA coverage cannot have their policy retroactively cancelled, enrollees in STLDI plans can.” [Wakely/ACAP, April 2018]

Short-Term Junk Plan Currently Being Sold In Thirteen States Does Not Cover Services For Patients Admitted To Hospital On The Weekend. “That brings us to the short-term plan marketed by UnitedHealth’s Golden Rule subsidiary….To begin with, the Golden Rule plan excludes pregnancy and provides for a lifetime maximum benefit of only $250,000. Remarkably, it won’t cover hospital room, board or nursing services for patients admitted to a hospital on a Friday or Saturday, unless for an emergency or for necessary surgery the next day.” [Los Angeles Times, 4/26/18]

JUNK COVERAGE PROVIDED BY SHORT-TERM PLANS LEAVES THOSE WHO GET SICK WITH THOUSANDS OF DOLLARS IN UNPAID BILLS

Atlanta Woman With Short-Term Plan Was Diagnosed With Cancer And Left With $400,000 Medical Bill. “Dawn Jones…bought a short-term plan from Golden Rule Insurance, a unit of UnitedHealth Group Inc., so she’d be covered between jobs, according to court documents. Then, she was diagnosed with breast cancer. Despite showing evidence she was unaware of the cancer when she bought the policy, the insurer didn’t pay for Jones’s treatment, leaving her with a $400,000 medical bill, according to a complaint she filed against the company in September 2016… the judge sided with Golden Rule and dismissed the case in August, finding the policy agreement clearly stated that preexisting conditions wouldn’t be covered, even if the customer was unaware of the condition. Jones wasn’t diagnosed until after she bought her policy.” [Bloomberg, 10/17/17]

San Antonio Man Paid Premiums To Short-Term Plan Company For Six Years, And Was Denied Coverage When He Developed Kidney Disease. “Pat’s decision to save some money by buying short-term insurance was a big mistake, says Karen Pollitz, project director of Georgetown University’s Health Policy Institute and a leading expert on the individual-insurance market. ‘These short-term policies are a joke,’ she says. ‘Nobody should ever buy them. It is false security that is being sold. It’s junk.’ That’s because diagnosing and treating an illness may not fall neatly into six-month increments. While Pat had been continuously covered since 2002 by the same company, Assurant Health, each successive policy treated him as a brand-new customer. In looking back over Pat’s medical records, the company noticed test results from December, eight months earlier. Though Pat’s doctors didn’t determine the precise cause of the problem until the following July, his kidney disease was nonetheless judged a ‘pre-existing condition’ — meaning his insurance wouldn’t cover it, since he was now under a different six-month policy from the one he had when he got those first tests.” [Time, 3/5/09]

In San Francisco, Woman Was Hit With $150,000 Charge After Short-Term Health Plan Refused Coverage. “Grace Wood, an instructor at a university in San Francisco, bought a short-term plan in 2013. When she had to have a heart procedure, her insurer, HCC Life, balked, leaving her with roughly $150,000 in unpaid medical bills.” [New York Times, 11/30/17]

Short-Term Insurance Plan Refuses To Pay For Man’s Triple Bypass Surgery, Leaving Family With $900,000 In Bills. “One case pending in federal court involves Kevin Conroy, who had a heart attack in 2014 and underwent triple bypass surgery, just two months after his wife, Linda, obtained a short-term policy over the telephone. Their insurer, HHC Life, refused to pay the bills. ‘We freaked out,’ Ms. Conroy said. ‘What were we going to do? It was $900,000.’ The insurer informed the Conroys the policy was ‘rescinded,’ to use the industry jargon. “[New York Times, 11/30/17]

SUBPAR COVERAGE OFFERED BY SHORT-TERM PLANS RAISES HEALTH COSTS FOR CONSUMERS WHILE RAKING IN PROFITS FOR INSURANCE COMPANIES

Short-Term Health Plans Rake In Profits For Insurance Companies While Leaving Consumers Unprotected. “That’s why they make up such a high-profit portion of the insurance industry: They are largely designed to rake in premiums, even as they offer little in return. And even when they do pay for things, they often provide confusing or conflicting protocols for making claims. Collectively, short-term plans can leave thousands of people functionally uninsured or underinsured without addressing or lowering real systemwide costs.” [The Atlantic, 4/25/18]

More Premium Dollars Can Go Toward Profit, Rather Than Coverage With Short-Term Plans. Short-term plans do not have to follow the Medical Loss Ratio, meaning that more premium dollars gan go toward administration and profit than under other plans. For instance, the largest seller of short-term insurance only requires 50% of premium dollars to pay for medical coverage, much less than the 80% required by ACA-compliant plans. [Wakely/ACAP, April 2018]

Junk Plans Lead To Higher Premiums For Those Enrolled In Full Coverage Plans. “While recent state-level and federal proposals differ in the details, they’d have a similar result: People who buy skimpy plans would face staggering costs when they get sick, and consumers who want comprehensive coverage could face drastic premium increases.” [Center on Budget and Policy Priorities, 2/5/18]

Short-Term Plans Divide Insurance Market Between Sick And Healthy. “Because short-term plans are not considered individual market coverage that must meet ACA standards, they can, and typically do, exclude coverage of pre-existing medical conditions, limit the amount of benefits that a person can receive from the plan in a year, and fail to include many of the essential health benefits, such as maternity care, mental health and substance-use disorder services, and prescription drugs…Short-term plans would be most likely to attract healthier people, leading to premium increases for ACA-compliant plans and destabilizing individual insurance markets across the nation.” [Center on Budget and Policy Priorities, 11/29/17]

Junk Plans Mean Higher Premiums For People With Pre-Existing Conditions. “By promoting short-term policies, the administration is making a trade-off: lower premiums and less coverage for healthy people, and higher premiums for people with preexisting conditions who need more comprehensive coverage.” [Washington Post, 5/1/18]

JUNK PLANS DESTABILIZE THE INDIVIDUAL MARKET, DRIVING UP COSTS FOR MIDDLE CLASS FAMILIES

Gary Claxton, Kaiser Family Foundation Vice President: Short-Term Plans “Draw In Healthy People And Spit Them Back Into The Marketplace When They’re Sick.” “Short-term health plans, meanwhile, have the ability to charge sick people more than healthy people, to deny people with preexisting conditions, and kick people off the plans if they get sick. If federal agencies decided to lift the limits on the short-term plans, and to exempt people on them from the penalty for not buying health insurance, Obamacare’s individual market could become destabilized, Claxton says. Healthy people would join the short-term plans when they were healthy, stay on them for a year, and pay little for skimpier coverage. If they got sick, they would be kicked off those plans and onto the Obamacare exchanges, where coverage is expansive but prices would be higher than they are now.” [The Atlantic, 10/12/17]

Tim Jost, Health Law Expert: Short Term Health Plans Provide Subpar Coverage and Destabilize Market. “As their name suggests, short-term plans provide coverage for a limited period of time, often six months or less. They generally don’t cover such things as preexisting conditions, maternity services or prescription drugs. The policies typically have maximum coverage limits of about $1 million. Insurers can turn people down if they’re sick and may decide not to renew someone’s policy… ‘The big health insurance companies are really mixed on this,’ said Timothy Jost, emeritus professor at Washington and Lee University School of Law and an expert on the health law. ‘They see this as a seriously destabilizing force in the market, this crap coverage.’” [Kaiser Health News, 1/31/17]

When Healthy Individuals Opt For Short-Term Plans, Costs Go Up For Those Who Are Sick. “To the extent that healthy individuals opt for cheaper short-term policies instead of ACA-compliant plans, such adverse selection contributes to instability in the reformed non-group market and raises the cost of coverage for people who have health conditions.” [Kaiser Family Foundation, 2/9/18]

Larry Levitt, Kaiser Family Foundation Senior Vice President: Short-Term Plans Will Raise Premiums for Middle Class Families. “‘The repeal of the mandate and expansion of association health plans and the rise of short-term plans will certainly send premiums rising for middle-class people with pre-existing conditions whose only option is the [ObamaCare]-regulated market,’ said Larry Levitt, a vice president at the Kaiser Family Foundation.” [The Hill, 1/7/18]

KEY HEALTH INSURANCE STAKEHOLDERS WARN AGAINST SHORT-TERM PLANS

98 Percent Of Health Groups That Submitted Comments To HHS Have Serious Concerns About The Short-Term Proposal.  “More than 98% — or 335 of 340 — of the healthcare groups that commented on the proposal to loosen restrictions on short-term health plans criticized it, in many cases warning that the rule could gravely hurt sick patients.” [Los Angeles Times, 5/30/18]

American Cancer Society Cancer Action Network: “Health Care Changes Could Leave Millions Of Cancer Patients And Survivors Unable To Access Meaningful Coverage.” “Today’s executive order jeopardizes the ability of millions of cancer patients, survivors and those at risk for the disease from being able to access or afford meaningful health insurance. Exempting an entire set of health plans from covering essential health benefits like prescription drugs or specialty care and allowing expansion and renewability of bare-bones short-term plans will split the insurance market. If younger and healthier people leave the market, people with serious illnesses like cancer will be left facing higher and higher premiums with few, if any, insurance choices.  Moreover, those who purchase cheap plans are likely to discover their coverage is inadequate when an unexpected health crisis happens leaving them financially devastated and costing the health care system more overall.” [ACS CAN, 10/12/17]

Blue Cross Blue Shield Officials Worry Short-Term Health Plans “Could Really Weaken The Efforts To Stabilize The Marketplace.” “Short-term plans can turn away people with pre-existing conditions, place caps on how much they’ll cover, and decline to cover services like maternity care. All of which means they could siphon healthy consumers out of the ACA’s marketplaces. ‘It could really weaken the efforts to stabilize the marketplace,’ says Kris Haltmeyer, BCBSA’s vice president of legislative and regulatory policy.” [Axios, 2/6/18]

American Academy of Family Physicians: STLD Plans Would Destabilize Individual Market. “We are troubled by how the proposed rule would further destabilize the individual market by drawing young, healthy people away from meaningful, comprehensive coverage…under the proposed rule, insurers could reduce or eliminate certain EHBs to avoid vulnerable, expensive patients by excluding specific services.” [Letter to HHS, 4/18/18]

ACS CAN: Short-Term Plans Are Exempt From Important Consumer Protections. “We are very concerned about policies that would expand access to STLD policies because these products are exempt from important consumer protections, such as prohibitions on lifetime and annual dollar limits, limits on the use of pre-existing condition exclusions, and the prohibition on medical underwriting…We are afraid that some consumers choose to enroll in STLD policies simply because of the lower premium and are unaware of the limitations of the coverage.” [ACS CAN letter to HHS, 4/20/18]

Alliance of Community Health Plans: Concerned It Will Leave Consumers With Fewer Coverage Options “ACHP is also concerned that the proposed rule will cause more insurers to flee the market, leaving consumers with fewer coverage options.” [Letter to HHS, 4/19/18]

American College of Rheumatology: Short-Term Plans Will Hurt Patients With Rheumatoid Arthritis. “We urge the agencies to consider how healthy individuals leaving the exchanges to purchase STLDI plans would affect market stability and premiums for those still in the health exchange. Potentially, our patients with diseases such as rheumatoid arthritis could see an upward swing in their premiums, causing further affordability and access issues” [American College of Rheumatology, 4/23/18]

AHIP: Short-Term Plans Should Not Be Offered As Replacement For Comprehensive Coverage.  “‘We recommend that short-term plans should not be offered as a full replacement for comprehensive coverage,’ AHIP says — because that could pull healthy customers out of the market for ACA coverage.” [Axios, 4/23/18]

Dr. David O. Barbe, president of American Medical Association: These Plans Would Result In “Inadequate Health Insurance Coverage.” “We believe the proposed rule, however, would culminate in plans being offered that fall far short of maintaining crucial state and federal patient protections, disrupt and destabilize the individual health insurance markets, and result in substandard, inadequate health insurance coverage.” [Forbes, 4/22/18]

Margaret Murray, CEO of Association for Community Affiliated Plans: Short Term Plans “strip every provision that might be of value to a patient.” “Not only do STLDI plans not cover pre-existing conditions, but what was covered when you bought the plan can be excluded three months later when you try to renew the plan. Rescissions are rampant in the STLDI market, leading to retroactive cancellation of policies that stick patients with enormous medical bills.” [Washington Examiner, 4/26/18]

Mario Molina, Former CEO of Molina Healthcare: Hopefully You Already Had Kids, Because Short-Term Plans Gut Maternity Care. “Hopefully, you had kids already, because under the short-term health plan expansion encouraged by an executive order signed last year, covered maternity care vanishes in 100% of plans analyzed by [the Kaiser Family Foundation]” [Mario Molina, 4/23/18]

California Department Of Insurance: “Trump Executive Order Will Create A Health Insurance Race To The Bottom.” “Increased sale of short-term policies that don’t cover essential health care needs or comply with most rules that apply to health insurance will harm consumers and create health insurance market instability.” [CDI, 10/12/17]

Sandy Praeger, Former Republican State Insurance Regulator In Kansas And Onetime President Of National Association Of Insurance Commissioners: “Basically anybody who knows anything about healthcare is opposed to these proposals.” [Los Angeles Times, 5/30/18]

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In News, Fact Sheet

Protect Our Care & Rural Forward Release Report on New Threats to Rural America

Protect Our Care and Rural Forward are today releasing a new report, “A Tough Row to Hoe: How Republican Policies are Leaving Rural Health Care in the Dust.” The report examines how Republican attacks on Medicaid and the Affordable Care Act are wreaking havoc in rural communities, where hospital closures are threatening access to care and local economies.

Read the report here.

“This report shows how the relentless war on health care being waged by President Trump and Republicans in Congress is reversing recent gains in rural coverage, raising premiums, and threatening key components of the rural health care system, especially rural hospitals,” said Brad Woodhouse, Protect Our Care Campaign Director.

“Rural communities have a lot to lose if President Trump and Republicans in Congress keep undermining Medicaid and pushing their repeal and sabotage agenda. Almost 90% of rural hospitals that have closed since the Affordable Care Act were in states that refused to expand Medicaid,” said John Whitaker, Executive Director, Rural Forward.

This morning, Senator Bob Casey (D-PA) and Congressman Donald McEachin (VA-04) join Protect Our Care and Rural Forward at a Capitol Hill press conference to launch the new report.

Watch the press conference at 10AM ET.

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In Fact Sheet, Research

Fact Sheet: The Cost of Sabotage To State & Local Taxpayers

REPUBLICAN HEALTH CARE SABOTAGE MEANS FEWER PEOPLE HAVE INSURANCE, WHICH DRIVE UP HOSPITALS’ UNCOMPENSATED CARE COSTS AND COSTS TAXPAYERS MONEY

For Each Person Who Becomes Uninsured, Hospitals’ Uncompensated Care Costs Increase By $900. One study, published by the National Bureau of Economic Research, estimated that “each newly uninsured person leads to nearly $900 in uncompensated care costs.” [National Bureau of Economic Research, June 2015]

Coverage Losses Threaten To Reverse Large Drops In Uncompensated Care That Resulted from The Affordable Care Act’s Historic Coverage Gains. “Between 2013 and 2015, as the nationwide uninsured rate fell from 14.5 percent to 9.4 percent (a 35 percent decline), uncompensated care costs as a share of hospital operating expenses fell by 30 percent.” [Center on Budget and Policy Priorities, 5/23/18; see state-by-state estimates in appendix]

Republican Sabotage Will Increase Uninsured By 3 Million In 2019. The nonpartisan Congressional Budget Office now projects that the number of uninsured people will increase by 3 million between 2018 and 2019. Per CBO, this is “mainly because the penalty associated with the individual mandate will be eliminated and premiums in the nongroup market will be higher.” [Congressional Budget Office, 5/23/18]

Using The National Bureau of Economic Research’s Estimate That Uncompensated Care Costs $900 Per Person, Sabotage Could Cost Hospitals $2.7 Billion In 2019. Using the National Bureau of Economic Research’s estimate that each person who loses insurance increases hospitals’ uncompensated care costs by $900, this coverage loss could result in $2.7 billion more uncompensated costs  in 2019. [Congressional Budget Office, 5/23/18]

In Michigan, Uncompensated Care Costs Fell After The State Expanded Medicaid. A University of Michigan study found that the average hospital’s uncompensated care expenses fell nearly 50 percent, from $7.21 million to $3.77 million, after the state expanded Medicaid. More than 90 percent of hospitals in the study saw a decline in uncompensated costs between 2013 and 2015. [University of Michigan, 12/31/16]

In Tennessee, The Reverse Held True; Medicaid Cuts Drove Up Uncompensated Care Costs. In 2005, approximately 4 percent of Tennessee’s non-elderly adult population lost public insurance coverage. Following these cuts, the uncompensated care each hospital provided increased. [National Bureau of Economic Research, June 2015]

When Hospitals Have Uncompensated Costs, Taxpayers Bear The Burden. “Hospitals do get help with the unpaid bills – from taxpayers. The majority of hospitals are non-profits and are exempt from federal, state and local taxes if they provide a community benefit, such as charitable care. Hospitals also receive federal funding to offset some of the costs of treating the poor.” [USA Today, 7/3/17]

BY PUSHING MEDICAID RESTRICTIONS, PRESIDENT TRUMP AND CONGRESSIONAL REPUBLICANS ARE HURTING STATE & LOCAL TAXPAYERS

19 States Still Refuse To Expand Medicaid, Denying Communities Financial Support. “National, multi-state, and single state studies show that states expanding Medicaid under the ACA have realized budget savings, revenue gains, and overall economic growth. A 2016 study found that growth in state Medicaid spending in expansion states has been lower relative to non-expansion states.” [Kaiser Family Foundation, 3/28/18]

Studies Show That Expanding Medicaid Can Save States Money. “Multiple studies suggest that Medicaid expansion can result in state savings by offsetting state costs in other areas, including state costs related to behavioral health services, crime and the criminal justice system, and Supplemental Security Income program costs. For example, a study on Montana revealed that as Medicaid’s role in financing substance use disorder (SUD) services has grown under the state’s decision to expand Medicaid, federal Medicaid dollars have replaced federal block grant and state dollars previously used to fund services for uninsured Montanans with SUD.” [Kaiser Family Foundation, 3/28/18]

Expanding Medicaid Helps States Save In Uncompensated Care Costs. The Center for Healthcare Research & Transformation at the University of Michigan found that in states that expanded Medicaid, uncompensated care costs decreased from $15.7 billion in 2013 to $9.6 billion in 2015, while costs in non-expansion states remained relatively stable. [Center for Healthcare Research & Transformation, July 2017]

The Trump Administration Is Pushing States To Adopt Medicaid Work Requirements, Which Cost States More Money Than They Save. In April, President Trump signed an executive order directing federal agencies to encourage states to require their residents to work in order to have health insurance through Medicaid. In addition to being widely understood as ways to reduce Medicaid enrollment, establishing such requirements is expected to actually cost taxpayers money:

Estimates From Nine States Show That Implementing Work Requirement Programs Includes Tremendous Costs. “As estimates from nine states implementing or considering such proposals show, projected costs are typically in the tens of millions of dollars per year, with even higher start-up costs for some states. Kentucky plans to spend $186 million in fiscal year 2018 and another $187 million in 2019 to implement its waiver. And a work requirement considered by Pennsylvania’s legislature would have cost $600 million and require 300 additional staff to administer, according to a state official. Effectively, these proposals divert some state and federal dollars from providing health care to creating new bureaucracy.” [Center on Budget and Policy Priorities, 5/23/18]

In Kentucky, Work Requirements Mean The State Will Lose Out On Federal Funding While Saving Taxpayers Relatively Little. “There’s an even more direct way that work requirements don’t make economic sense. According to Kentucky’s own calculations, the Medicaid waiver will reduce the flow of federal funds to the state by nearly $700 million annually by 2021, while reducing state spending, and taxes paid by state residents, much more modestly… By 2021, when the waiver effects are fully in place, Kentucky will forgo about $680 million annually in federal funds. Kentucky residents will benefit very little from lower taxes as a result of this reduced federal spending — 99 percent of any federal savings will accrue to residents of other states (since Kentuckians contribute just 1 percent of all federal income taxes).” [Commonwealth Fund, 4/9/18]

Restricting People’s Access To Medicaid Will Likely Increase Hospitals’ Uncompensated Care Costs. “Coverage losses from eligibility restrictions will increase uncompensated care costs…Because new eligibility restrictions are projected to reverse a meaningful share of the coverage gains under the ACA’s Medicaid expansion, they will likely reverse a significant share of uncompensated care savings as well.” [Center on Budget and Policy Priorities, 5/23/18]

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In News, Fact Sheet

Association Health Plans

By including a provision encouraging the proliferation of association health plans, the annual House farm bill has become the latest vehicle for Republican attacks on comprehensive coverage and pre-existing condition protections. The bill authorizes $65 million in taxpayer funding to set up association health plans, which would be allowed to exclude or limit basic services such as prescription drug coverage, mental health care, and maternity care. Before the Affordable Care Act, these kinds of plans had a long history of fraud and unpaid claims, because many states exempt them from key consumer protections. When these plans fail, they leave people who thought they had real coverage out in the cold.

ASSOCIATION HEALTH PLANS DON’T HAVE TO OFFER COMPREHENSIVE COVERAGE

Vox: Association Health Plans Could Allow Groups To Act As Large Employers Which Do Not Have To Cover Essential Benefits Under The ACA. “The result could in many cases be that these new association health plans would be considered large employers when it comes to health insurance. Large employers are not subject to the same rules as individual or small-group plans under Obamacare. Most notably, they do not have to cover all of the law’s essential health benefits or meet the requirement that insurance cover a minimal percentage of a person’s medical bills.” [Vox, 10/12/17]

Treating Association Health Plans Like Large Employers Would Exempt Them From Guaranteeing Essential Health Benefits And Allow Them To Charge People Based On Health Status And Gender. Treating Association Health Plans like large-employers would exempt them from key consumer protections under the Affordable Care Act. Large employers do not have to offer plans with the Essential Health Benefits like maternity care, prescription drug coverage or mental health and substance abuse services. Insurers for large employers can also charge more based on health status and gender. [Georgetown Center on Health Insurance Reforms, December 2017]

Katherine Hempstead, Robert Wood Johnson Foundation: “The Easier You Make It Not To Buy Comprehensive Coverage, The Harder You Make It Buy Comprehensive Coverage.” [New York Times, 10/11/17]

ASSOCIATION HEALTH PLANS HAVE A HISTORY OF FRAUD AND UNPAID CLAIMS

Former Insurance Fraud Investigator: “Fraudulent Association Health Plans Have Left Hundreds Of Thousands Of People With Unpaid Claims.” “Marc I. Machiz, who investigated insurance fraud as a Labor Department lawyer for more than 20 years, said the executive order was ‘summoning back demons from the deep.’ ‘Fraudulent association health plans have left hundreds of thousands of people with unpaid claims,’ he said. ‘They operate in a regulatory never-never land between the Department of Labor and state insurance regulators.’” [New York Times, 10/21/17]

2017: Labor Department Filed A Suit Against An AHP For 300 Employers In Washington State Alleging The AHP Had Charged Employers More Than $3 Million In Excessive Fees And Violating Its Fiduciary Duty By Using Assets For Personal Interests. “The problems are described in dozens of court cases and enforcement actions taken over more than a decade by federal and state officials who regulate the type of plans Mr. Trump is encouraging, known as association health plans. In many cases, the Labor Department said, it has targeted ‘unscrupulous promoters who sell the promise of inexpensive health benefit insurance, but default on their obligations.’ In several cases, it has found that people managing these health plans diverted premiums to their personal use. The department filed suit this year against an association health plan for 300 small employers in Washington State, asserting that its officers had mismanaged the plan’s assets and charged employers more than $3 million in excessive ‘administrative fees.’ Operators of the health plan violated their fiduciary duty by using its assets ‘in their own interest,’ rather than for the benefit of workers, the government said.” [New York Times, 10/21/17]

2016: A Labor Department Lawsuit Revealed An AHP Had Concealed Financial Problems And Left $3.6 Million In Unpaid Claims. “The Labor Department filed suit last year against a Florida woman and her company to recover $1.2 million that it said had been improperly diverted from a health plan serving dozens of employers. The defendants concealed the plan’s financial problems from plan participants and left more than $3.6 million in unpaid claims, the department said in court papers.” [New York Times, 10/21/17]

A Health Plan For New Jersey Small Businesses Collapsed With $7 Million In Unpaid Claims. “In another case, a federal appeals court found that a health plan for small businesses in New Jersey was ‘aggressively marketed but inadequately funded.’ The plan collapsed with more than $7 million in unpaid claims.” [New York Times, 10/21/17]

In Florida, A Man Pleaded Guilty To Embezzling $700,000 In Premiums From An AHP To Help Build A Home For Himself And Was Sentenced To 57 Months In Prison. “A Florida man was sentenced to 57 months in prison after he pleaded guilty to embezzling about $700,000 in premiums from a health plan that he had marketed to small businesses. The Labor Department and the Justice Department said he had used some of the plan premiums to build a home for himself.” [New York Times, 10/21/17]

In South Carolina, A Man Pleaded Guilty To Diverting Nearly $1 Million From An AHP For Churches And Small Businesses, Leaving $1.7 Million In Unpaid Claims. “A South Carolina man pleaded guilty after the government found that he had diverted more than $970,000 in insurance premiums from a health plan for churches and small businesses. ‘His embezzlement and the plan’s consequent failure left behind approximately $1.7 million in unpaid medical claims,’ the Labor Department said.” [New York Times, 10/21/17]

In Louisiana, Two People Pleaded Guilty To Using Money From The AHP For Spa Treatments, Diamond Cuff Links, Foreign Travel And Other Personal Expenses. “And in Louisiana, two people pleaded guilty to conspiracy charges after the government found that they had taken money from the medical benefit fund of a trade association and used it to pay for spa treatments, diamond cuff links, evening gowns, foreign travel and other personal expenses.” [New York Times, 10/21/17]

One AHP Scheme Shows How AHPs Can Move From State To State. Families USA chronicled an AHP scheme involving the American Trade Association, Smart Data Solutions, and Serve America Assurance. They found:

  • “Even after one state identifies a problem, the company may continue to operate for years in other states. North Carolina issued a cease and desist order to stop many of the players in this case from selling insurance in 2008.”
  • “But by June 2010, when Maryland issued a cease and desist order, the plans sold by these players had been identified in at least 23 states.2 „ Estimates of total premiums paid to these companies for unauthorized, unlicensed plans range from $14 million to $100 million.”
  • “This particular scheme operated through associations that went by many different names. (At least one of the players in this case was involved in a previous case concerned with fraudulent insurance sold through an association of employers in 2001-2002.”
  • “Consumers are often ill-protected when they buy coverage through an association, and the web of relationships among salespeople, associations, administrators, and actual insurers can be difficult for regulators to unravel and oversee. Consumers may be encouraged to join fake associations to buy health insurance so they have an illusion of coverage—and the insurers collect membership dues and premiums while illegally avoiding state oversight).” [Families USA, October 2010]

GAO Report In 1992 Showed Similar AHPs Left At Least 398,000 Participants With More Than $123 Million In Unpaid Claims And More Than 600 Plans In Almost Every State Failed To Comply With State Laws. “Back in 1992, the Government Accountability Office issued a scathing report on these multiple employer welfare arrangements (known as MEWAs; they’re pronounced “mee-wahs”) in which small businesses could pool funds to get the lower-cost insurance typically available only to large employers. These MEWAs, said the government, left at least 398,000 participants and their beneficiaries with more than $123 million in unpaid claims between January 1988 and June 1991. Furthermore, states reported massive and widespread problems with MEWAs. More than 600 plans in nearly every U.S. state failed to comply with insurance laws. Thirty-three states said enrollees were sometimes left without health coverage when MEWAs disbanded…’MEWAs have proven to be a source of regulatory confusion, enforcement problems and, in some instances, fraud,’ the GAO wrote at the time.” [Washington Post, 10/12/17]

Kentucky Experiment Showed AHPs Destabilize The Market And Caused Insurers To Leave Individual Market Or Not Sell New Policies Subject To Higher Standards. “In 1994, Kentucky passed a set of health insurance reforms (for the individual and small-group markets) that were very similar to the ACA’s market reforms.  These included a requirement for insurers to accept all applicants regardless of their health status, restrictions on exclusions of pre-existing health conditions, and a requirement that premiums be set without regard to health status, claims experience, or gender.  Premium variations for age, family size, and geographic factors were limited, and plan benefits were standardized. Insurers in the state resisted the reforms and lobbied to repeal parts of it. In 1996, Kentucky’s legislature passed legislation that repealed many of the market reforms.  Crucially, the law exempted associations of employers or individuals from the premium-rating and benefits requirements, a loophole that allowed associations to sell coverage under a much weaker regulatory scheme. In part because healthy individuals could buy association plans, the risk of adverse selection against the reformed individual market increased.  Nearly all insurers left Kentucky’s individual market or declined to sell new policies that were subject to the stronger rating and benefits standards. In 1998, the Kentucky legislature passed a bill that repealed many of the state’s remaining health insurance reforms.” [Center on Budget and Policy Priorities, 11/29/17]

KEY STAKEHOLDERS OPPOSE AHPs, SAYING THEY WOULD DESTABILIZE THE MARKETS, RAISE COSTS AND GUT PROTECTIONS FOR PEOPLE WITH PRE-EXISTING CONDITIONS

American Cancer Society Cancer Action Network, American Diabetes Association, American Heart Association, American Liver Foundation, American Lung Association, Arthritis Foundation, Crohn’s And Colitis Foundation, Cystic Fibrosis Foundation, Epilepsy Foundation, Lutheran Services In America, March Of Dimes, Muscular Dystrophy Association, National Health Council, National Multiple Sclerosis Society, National Organization For Rare Disorders, United Way Worldwide, Volunteers Of America, Womenheart: “This Order Has The Potential To Price Millions Of People With Pre-Existing Conditions And Serious Illnesses Out Of The Individual Insurance Market And Put Millions More At Risk.” “This order has the potential to price millions of people with pre-existing conditions and serious illnesses out of the individual insurance market and put millions more at risk through the sale of insurance plans that won’t cover all the services patients want to stay healthy or the critical care they need when they get sick…Together, these actions would likely split the market between those who need the comprehensive benefits provided under current law and those who are currently healthy and can gamble with substandard coverage. Siphoning off healthy people into risky, low-value plans, could leave millions of Americans with chronic or serious illnesses in an unsustainable insurance pool with rising premiums and fewer choices. It could also leave those who are healthy seriously underinsured when they face an unexpected health crisis.” [Letter, 10/12/17]

American Cancer Society Cancer Action Network: “Health Care Changes Could Leave Millions Of Cancer Patients And Survivors Unable To Access Meaningful Coverage.” “Today’s executive order jeopardizes the ability of millions of cancer patients, survivors and those at risk for the disease from being able to access or afford meaningful health insurance. Exempting an entire set of health plans from covering essential health benefits like prescription drugs or specialty care and allowing expansion and renewability of bare-bones short-term plans will split the insurance market. If younger and healthier people leave the market, people with serious illnesses like cancer will be left facing higher and higher premiums with few, if any, insurance choices.  Moreover, those who purchase cheap plans are likely to discover their coverage is inadequate when an unexpected health crisis happens leaving them financially devastated and costing the health care system more overall.” [ACS CAN, 10/12/17]

American Hospital Association: “These Provisions Could Destabilize The Individual And Small Group Markets, Leaving Millions Of Americans Who Need Comprehensive Coverage To Manage Chronic And Other Pre-Existing Conditions.” “Today’s Executive Order will allow health insurance plans that cover fewer benefits and offer fewer consumer protections…In addition, these provisions could destabilize the individual and small group markets, leaving millions of Americans who need comprehensive coverage to manage chronic and other pre-existing conditions, as well as protection against unforeseen illness and injury, without affordable options.” [AHA, 10/12/17]

American Medical Association: “The Executive Order’s Proposal To Expand Access To Association Health Plans And Allow Short-Term Plans To Cover Longer Time Periods May Weaken Important Patient Protections And Lead To Instability In The Individual Health Insurance Market.” “The AMA supports patient choice and promoting market competition, and supports the concept of association health plans. We have concerns, however, the Executive Order’s proposal to expand access to association health plans and allow short-term plans to cover longer time periods may weaken important patient protections and lead to instability in the individual health insurance market.” [AMA, 10/12/17]

American Academy Of Actuaries: “These Effects Could Include Tilting The Market In Favor Of Entities With Weaker Benefits Or Solvency Standards And Weakening The Protections For Consumers With Pre-Existing Health Conditions.” “‘Creating exemptions from the Affordable Care Act (ACA) insurance market rules can have far-reaching and unintended effects,’ said Academy Senior Health Fellow Cori Uccello. ‘These effects could include tilting the market in favor of entities with weaker benefits or solvency standards and weakening the protections for consumers with pre-existing health conditions.’” [AAA, 10/12/17]

Small Business Majority: “These Changes Would Be Bad For Small Businesses And Their Employees Because They Could Lead To Higher Premiums, Unbalanced Risk Pools And Lower-Quality Insurance.” “We are extremely disappointed this administration continues to undermine the Affordable Care Act (ACA), as evidenced today when President Trump signed an executive order allowing insurance companies to sell health insurance products across state lines and making it easier for groups to establish association health plans (AHPs). These changes would be bad for small businesses and their employees because they could lead to higher premiums, unbalanced risk pools and lower-quality insurance. While President Trump’s order would make it easier for a few select small businesses with younger and/or healthier employees to purchase association health plans that might be cheaper in other states, the tradeoff is that this would result in the emergence of parallel insurance markets for small businesses, leading to major spikes in premiums for small firms that remain in the small-group market.” [SBA, 10/12/17]

Consumers Union: “Executive Order On Health Plans Destabilizes Insurance Markets, Hurts Consumers, Drives Up Costs.” “While this executive order claims to help improve consumers’ access to affordable care, it would have the exact opposite effect. Allowing insurers to sell substandard association health plans that aren’t required to cover basic services and benefits will further fragment and destabilize the insurance markets as a whole. This action splits the market into two, pitting the healthy against those with preexisting conditions and life-threatening illnesses — but ultimately both groups lose in this new scheme.” [Consumers Union, 10/12/17]

American Federation Of Teachers: [Donald Trump] “Is Ignoring The Rule Of Law, Refusing To Compromise, And Doing An End-Run Around Congress In Order To Strip People Of Their Healthcare.” “Donald Trump owns the unwinding of the Affordable Care Act. He is ignoring the rule of law, refusing to compromise, and doing an end-run around Congress in order to strip people of their healthcare. Millions of Americans will be worse off because of his actions. This is an ongoing pattern of the Trump administration’s callous sabotage of Obamacare, and it will cause real harm to American families, leading to increased premiums and loss of coverage for those most in need of healthcare and flooding markets with cheap, limited ‘junk’ insurance.” [AFT, 10/12/17]

NETWORK Lobby: “The Trump Administration Continues To Do As Much As Possible To Destabilize The American Healthcare System, Increase Costs For Families, And Prevent People From Accessing The Care They Need.” “The Trump Administration continues to do as much as possible to destabilize the American healthcare system, increase costs for families, and prevent people from accessing the care they need. Today’s executive order is the latest attack on our healthcare, following a long line of attempts to repeal and cripple the ACA. This executive order will drive up premiums for many—especially middle-class families and people with pre-existing conditions—to further undermine the ACA. It is morally reprehensible to hurt people through unjust policies for political gain.” [Statement, 10/12/17]

ASSOCIATION HEALTH PLANS ALLOW PROVIDERS TO CHERRY PICK HEALTHIER PEOPLE, RAISING COSTS ON PEOPLE WITH PRE-EXISTING CONDITIONS AND DESTABILIZING THE MARKET

Tim Jost: “It Will Destroy The Small-Group Market…We’ll Be Back To Where We Were Before The Affordable Care Act.” “The result could in many cases be that these new association health plans would be considered large employers when it comes to health insurance. Large employers are not subject to the same rules as individual or small-group plans under Obamacare. Most notably, they do not have to cover all of the law’s essential health benefits or meet the requirement that insurance cover a minimal percentage of a person’s medical bills.If that change were made, association health plans would be freed to craft skimpier (and cheaper) health plans that appeal only to businesses with younger and healthier employees. Small businesses left in Obamacare’s marketplace would likely face higher costs and fewer options as the market became less attractive to insurers. ‘It will destroy the small-group market,’ Tim Jost, a law professor at Washington and Lee University who generally supports Obamacare, told me before the order was signed. ‘We’ll be back to where we were before the Affordable Care Act.’” [Vox, 12/29/17]

Georgetown Center on Health Insurance Reforms: Prior To ACA, AHPs Would Set Up Headquarters In A State With Fewer Regulations And Market To States With More Regulations. “Additionally, AHPs would often set up headquarters in one state with limited regulatory oversight and market policies to businesses and consumers in other states with more robust regulation, thereby bypassing those states’ more protective rating and benefit standards.” [Georgetown Center on Health Insurance Reforms, December 2017]

Deep Banerjee, S&P Global Ratings: “No One Healthy Is Now Going To Sign Up In The ACA Risk Pool, Because They Have This Cheaper Option.” “With associations, health care providers can effectively choose the most desirable participants, allowing the healthy to make the switch to save money — and potentially shutting out the less healthy. ‘No one healthy is now going to sign up in the ACA risk pool, because they have this cheaper option,’ Deep Banerjee, a health care analyst at S&P Global Ratings said.” [UPI, 10/12/17]

 

ashoup
In Research, Fact Sheet

Protect Our Care Fact Sheet: Stabilization Negotiators Must Reject High-Risk Pools

After USA Today reported that Senate health care stabilization negotiators are discussing bringing back high-risk pools, Protect Our Care is releasing a fact sheet detailing why this approach won’t work, as well as a statement from Protect Our Care Campaign Director Brad Woodhouse:

“Health care advocates continue to call for a bipartisan stabilization package to address the individual insurance market damage being caused by Trump Administration sabotage. Any serious proposal must reject bringing back high-risk pools, failed experiments that segregate sick people in worse coverage and that would further destabilize the markets.

“It’s time for Congressional Republicans to reject the partisan war on health care, stop pushing proposals that hurt people with pre-existing conditions, and start working with Democrats to come up with real solutions that bring down health care costs for American families.”

FACT SHEET: EVIDENCE SHOWS HIGH RISK POOLS ARE THE WRONG ANSWER

Stabilization Negotiators Must Reject Higher Costs & Coverage Restrictions for People With Pre-Existing Conditions

As Congressional negotiators consider health care stabilization proposals to include in next month’s Omnibus, overwhelming evidence shows that high-risk pools are one idea they should take off the table. This is a tool that has been tried and failed. Here’s why high risk pools would make challenges in American health care worse, not better:

HIGH RISK POOLS IMPOSE HIGH PREMIUMS & DEDUCTIBLES …

Premiums For Coverage In High Risk Pools Were As Much As 200 Percent Higher Than The Average Rate But Covered Less Care. “High-risk pool enrollees faced substantially higher premiums than people in the normal individual market, often by as much as 150 percent to 200 percent, although some pools did offer subsidies to low-income enrollees…And stunningly, the overwhelming majority of state high-risk pools actually refused to pay for services associated with a patient’s pre-existing conditions in the first months of their enrollment.” [Center for American Progress, 2/16/17]

Deductibles For High Risk Pool Enrollees Were Well Above Maximum Allowed By ACA. ”Fourteen states had plans with deductibles of $10,000 per year or higher, substantially greater than the current maximum $7,150 deductible for catastrophic plans in the marketplaces. Thirty states imposed maximum lifetime limits; others had annual coverage limits as low as $75,000 per year.” [Commonwealth Fund, 3/29/17]

  Source: Commonwealth Fund, 3/24/17

… COST TAXPAYERS MORE …

Despite High Premiums, High Risk Pools Could Still Cost The American People Over $90 Billion Annually. “The U.S. Department of Health and Human Services (HHS) recently estimated that up to 17,875,000 people with preexisting conditions were uninsured in 2010. Had all of them been covered by high-risk pools, the cost would have been $194.8 billion in 2010 dollars, with premiums covering only $103.3 billion. Thus, states and the federal government would have needed to find $91.5 billion in additional funding to cover them all—much more than the up to $10 billion per year in federal assistance to states recently proposed by congressional Republicans.” [Commonwealth Fund, 3/29/17]

An Analysis Of High Risk Pools Under The ACHA Finds Such Pools Would Cost The Government Between $37 and $56 Billion Annually. “Government costs for supporting the high-risk pool using ACA-like coverage and subsidies would range from $37 to $56 billion in 2020 and $437 to $656 billion over 10 years (2020–2029), depending upon the eligibility rules used.” [The Urban Institute, May 2017]

Even Conservatives Estimated High Risk Pools Would Cost $15-$20 Billion Annually. “For comparison, conservative experts James Capretta and Tom Miller have estimated that $15 billion to $20 billion per year, or $150 billion to $200 billion over 10 years, would be needed to fully finance high-risk pools even if they covered only 2 million to 4 million people.” [Center For American Progress, 2/16/17]

Premiums For High Risk Pool Coverage Paid Just 53 Percent Of Program Costs. “Premiums ranged from 125 percent to 200 percent of average premiums in the individual market, yet covered only about 53 percent of claims and administrative costs nationally (Wisconsin allowed premiums up to 200 percent of average).” [Commonwealth Fund, 3/29/17]

… AND RESTRICT COVERAGE

High Risk Pools Typically Had Pre-Existing Condition Exclusions And Limited Benefits. “Many such pools had pre-existing condition exclusion periods, limited benefits, and enrollment limits; all of these characteristics served to reduce the value of the coverage, creating high financial burdens for enrollees and limiting the number of people who could access the coverage.” [Health Affairs, 3/15/16]

Most State High Risk Pools Had Lifetime And Annual Limits On Coverage.  “Thirty-three pools [out of 35 states] imposed lifetime dollar limits on covered services, most ranging from $1 million to $2 million. In addition, six pools imposed annual dollar limits on all covered services while 13 others imposed annual dollar limits on specific benefits such as prescription drugs, mental health treatment, or rehabilitation.” [Kaiser Family Foundation, 2/22/17]

High Risk Pools Typically Had Waiting Periods. “There were 35 state high-risk pools before the Affordable Care Act passed. To control costs, they would often do things like charge higher premiums than the individual market. Most had waiting periods before they would pay claims on members’ preexisting conditions, meaning a cancer patient would need to pay premiums for six months or a year before the high-risk pool would cover her chemotherapy treatments.” [Vox, 5/3/17]

High Risk Pools Mean Delayed Or Forgone Care. “Even once they were in a high-risk pool, the high costs and limited benefits prompted some people to delay or forgo care, leading to poorer health outcomes and even more spending. And many families accrued substantial medical debt, even with the coverage.” [Stateline, 2/16/17]

HIGH RISK POOL = MORE PEOPLE UNINSURED

Limited Coverage And High Costs Cause People To Remain Uninsured. “Some patients also delayed care to save money, exacerbating their health conditions, and only entered the pools when their conditions became emergencies.” [Stateline, 2/16/17]

CMS: One-Third Of Uninsurable Were Unable To Afford High Risk Pool Coverage. A 2004-05 study by the Center for Medicare and Medicaid Services found that “nationally, high-risk pool premiums are above 25 percent of family income (i.e., are unaffordable) for 10 percent of all individuals, 18 percent of the uninsured, and 29 percent of the uninsurable. By these standards, almost one-third of the uninsurable are unable to afford high-risk pool coverage…” [CMS, Health Care Financing Review, Winter 2004-2005]

HIGH RISK POOLS HAVE BEEN TRIED & FAILED

California High Risk Pool Led To Waiting Lists, High Premiums, And Lifetime Limits. “For example, California’s high-risk pool imposed a shorter-than-average, three-month waiting period before enrollees could receive treatment for pre-existing conditions—but also imposed a $75,000 annual limit on benefits along with a $750,000 lifetime limit. In addition, the state capped enrollment, resulting in long waiting lists of people unable to enroll; at the same time, the pool’s high premiums proved difficult for enrollees to afford, leading some to drop out.” [Center for American Progress, 2/16/17]

Premiums in Florida’s High Risk Pool Were Twice The Normal Rate. “Many states starved high-risk pools of cash. Florida’s contained only about 200 people in 2011. Premiums were commonly twice the normal rate. Many states had enrolment caps, meaning that even people willing to fork over were not guaranteed coverage.” [The Economist, 1/16/17]

In Wisconsin, “Cancer Doesn’t Wait” For High Risk Pool Waiting Periods. “The benefit waiting periods used by Wisconsin’s and other states’ high-risk pools are a big concern for patient advocates and provider groups. ‘A six-month exclusionary period is a serious issue,’ said Dr. Len Lichtenfeld, deputy chief medical officer for the American Cancer Society, who also testified at the House hearing. ‘Cancer doesn’t wait.’” [Modern Healthcare, 2/13/17]

In Utah, High Risk Pools Were Limited In Size, And Offered Sub-Par, Delayed Coverage. “Stevenson said only 3,000 people signed up for Utah’s risk pool plan while 200,000 Utahns are signed up for insurance through Obamacare. ‘Utah’s past high risk pool plan had many limitations too,’ he said. People with pre-existing conditions had to wait six months before using their coverage. Pregnant women had a 10 month waiting period before they had any coverage for them or their baby. ‘The measure of success for a program is how many people it helps and if you are only covering 3,000 people and leaving tens of thousands uninsured, I don’t think that’s a good thing to go back to,’ he said.” [CBS KUTV, 3/9/17]

High Risk Pools Mean Higher Costs, Higher Uninsured, And Less Coverage. “The reality is that high-risk pool coverage was prohibitively expensive and there is little evidence to suggest that the existence of such pools made coverage less costly for others in the individual insurance market. Without substantially more federal funding than currently proposed, these facts are not likely to change. People with preexisting conditions may have “access” to coverage, but most will not be able to afford it and those who can will face limited benefits and extremely high deductibles and out-of-pocket payments.” [Commonwealth Fund, 3/29/17]

Sean England
In Research, Fact Sheet

Fact Sheet on Health Repeal in Senate Passed Tax Bill Spotlight — Rep. Barbara Comstock (R-VA)

Spotlight: Rep. Barbara Comstock (R-VA)

Senate Republicans passed a tax bill on Friday night that repeals health care to pay for another massive tax break for the wealthiest and corporations. What the repeal of the individual mandate in the Senate bill means is simple: while the wealthy and corporations get a tax break, middle-class families will get double digit premium increases, 13 million people will lose their coverage, older Americans will get an age tax and $25 billion in Medicare funding will be cut.

The bill passed by the House did not include the repeal of the individual mandate. The House should insist that it stays out. Rep. Barbara Comstock (R-VA) has one opportunity left to take a stand against any inclusion of the individual mandate in the final bill which, if passed with the repeal of the individual mandate, would cause 287,000 people to lose coverage in Virginia including 28,800 in Rep. Comstock’s district, raise premiums on middle-class families by $2,140 and impose an age tax of up to $1,600 on older Virginians, and cut $546 million in Medicare funds to Virginia all to pay for tax cuts for the wealthy and corporations.

SENATE REPUBLICANS JUST VOTED TO REPEAL HEALTH CARE — RAISING PREMIUMS BY DOUBLE DIGITS FOR MIDDLE CLASS FAMILIES, RIPPING AWAY COVERAGE FOR 13 MILLION AMERICANS, IMPOSING AN AGE TAX ON OLDER AMERICANS AND GUTTING MEDICARE BY $25 BILLION — ALL TO PAY FOR SPECIAL TAX BREAKS FOR MILLIONAIRES AND BIG CORPORATIONS

Congressional Budget Office: Republican Tax Bill Will Result In 13 Million More Uninsured People. “The number of people with health insurance would decrease by 4 million in 2019 and 13 million in 2027.” [CBO, 11/8/17]

Center For American Progress: Senate Tax Bill Will Result In 287,000 More Uninsured In Virginia, 28,800 More In Rep. Comstock’s District.[Center for American Progress, 11/16/17, 12/5/17]

CBO: Average Premiums Will Increase By 10 Percent In Most Years Of The Next Decade Due To The Republican Tax Bill. “Average premiums in the nongroup market would increase by about 10 percent in most years of the decade (with no changes in the ages of people purchasing insurance accounted for) relative to CBO’s baseline projections.” [CBO, 11/8/17]

Center For American Progress: Marketplace Premiums For A Typical Middle-Class Family In Virginia Will Rise By $2,140 In 2019. [Center for American Progress, 11/16/17]

CBO: Healthier People Less Likely To Purchase Health Coverage, Raising Costs For Everyone Else. “Those effects would occur mainly because healthier people would be less likely to obtain insurance and because, especially in the nongroup market, the resulting increases in premiums would cause more people to not purchase insurance.” [CBO, 11/8/17]

AARP: Premiums For People Over 50 Would Increase Up To $1,500 Nationally, And Up To $1,600 In Virginia, Because Of Health Care Repeal In The Republican Tax Bill. “The Tax Cuts and Jobs Act as reported by the Senate Finance Committee on Nov. 16, 2017 includes a new provision that would both reduce health care coverage and increase costs for millions of Americans. Older adults ages 50–64 would be at particularly high risk under the proposal, facing average premium increases of up to $1,500 in 2019 as a result of the bill.” [AARP, 11/21/17]

CBO: Republican Tax Bill Would Trigger A $25 Billion Cut To Medicare.“Without enacting subsequent legislation to either offset that deficit increase, waive the recordation of the bill’s impact on the scorecard, or otherwise mitigate or eliminate the requirements of the PAYGO law, OMB would be required to issue a sequestration order within 15 days of the end of the session of Congress to reduce spending in fiscal year 2018 by the resultant total of $136 billion. However, the PAYGO law limits reductions to Medicare to four percentage points (or roughly $25 billion for that year), leaving about $111 billion to be sequestered from the remaining mandatory accounts.” [CBO, 11/14/17]

Center For American Progress: Virginia Would See A $546 Million Cut In Medicare Funds. [Center for American Progress, 11/16/17]

Sen. Marco Rubio (R-FL): Republicans Need To Cut Medicare Next To Pay For Tax Cuts. “‘I analyze this very differently than most,’ Rubio told the crowd. ‘Many argue that you can’t cut taxes because it will drive up the deficit. But we have to do two things. We have to generate economic growth which generates revenue, while reducing spending. That will mean instituting structural changes to Social Security and Medicare for the future,’ the senator said.” [Financial Advisor Magazine, 11/30/17]

Center On Budget And Policy Priorities: “Senate Tax Bill Would Add 13 Million To Uninsured To Pay For Tax Cuts Of Nearly $100,000 Per Year For The Top 0.1 Percent.” “The savings from eliminating the mandate would come entirely from reducing health coverage. For example, the federal government would spend less on premium tax credits because fewer people would sign up for marketplace coverage, less on Medicaid because fewer people would enroll, and less on the tax exclusion for employer-sponsored health insurance because fewer employees would enroll in job-based coverage. These savings are what let Senate leaders make their full corporate rate cut permanent…The benefits of corporate rate cuts go overwhelmingly to high-income households.” [CBPP, 11/15/17]

PASSING ALEXANDER-MURRAY AFTER VOTING FOR REPEAL IS LIKE INSTALLING GUARDRAILS ON THE HIGHWAY AFTER YOUR CAR HAS GONE OVER THE CLIFF

CBO: Passing Alexander-Murray After The Repeal Of The Individual Responsibility Provision Would Not Undo The Damage. “In your letter of November 21, 2017, you asked about the combined effects of simultaneously passing the BHCSA and legislation that would repeal the requirement that most U.S. citizens and noncitizens who lawfully reside in the country have health insurance meeting specified standards. Specifically, you asked if legislation that combined the provisions would change the agencies’ previous estimates of the number of people with insurance coverage or premiums in the nongroup insurance market. In the estimate for the BHCSA, the agencies wrote that, relative to the Summer 2017 baseline, the legislation would not substantially change the number of people with health insurance coverage, on net.” [CBO, 11/29/17]

There Is No Guarantee Alexander-Murray Would Pass The House, Let Alone Become Law. There is no guarantee Alexander-Murray would pass the House, let alone become law. Speaker Ryan dodged questions about its fate in the House. House conservatives called it a “nonstarter.” And President Trump has been all over the map on this issue his word cannot be trusted.

THE LEADING EXPERTS — PATIENT GROUPS, INSURERS, DOCTORS AND HOSPITALS — AND MORE THAN 2,400 FAITH LEADERS AND THE AMERICAN PEOPLE OPPOSE HEALTH REPEAL

American Cancer Society Cancer Action Network, American Diabetes Association, American Heart Association, And 16 More Leading Patient Groups: People With “Serious Health Care Needs” And With Pre-Existing Conditions “May Not Be Able To Afford Coverage.” “Many individuals with serious health care needs, including patients with chronic or major health conditions, who by definition, have a pre-existing condition, may not be able to afford coverage.” [The Hill, 11/28/17]

America’s Health Insurance Plans, American Academy Of Family Physicians, American Hospital Association, American Medical Association, Blue Cross Blue Shield Association, Federation Of American Hospitals: Leading Industry Groups Warn Of “Serious Consequences” Should The Mandate Be Repealed. “As providers of healthcare and coverage to hundreds of millions of Americans, we are committed to assuring everyone has access to a range of high quality, affordable coverage options so they can access the care they need, regardless of pre-existing conditions. To achieve this critical goal, we are urging you to maintain the individual mandate unless and until Congress can enact a package of reforms to adequately assure a balanced risk pool and prevent extraordinary premium increases.” [Letter, 11/14/17]

More Than 2,400 Faith Leaders: “That The Number Of Uninsured Individuals Would Increase By 13 Million By 2025…Violates Our Faith Teaching.” “The individual mandate is critical to keeping individual market coverage affordable and keeping the individual market stable. By repealing the individual mandate, legislation will cause catastrophic losses in health coverage. The CBO estimates that the number of uninsured individuals would increase by 13 million by 2025, which violates our faith teaching.” [Letter, 11/29/17]

Sean England
In Fact Sheet, Research

Fact Sheet on Health Repeal in Senate Passed Tax Bill Spotlight — Rep. Brian Fitzpatrick (R-PA)

Spotlight: Rep. Brian Fitzpatrick (R-PA)

Senate Republicans passed a tax bill on Friday night that repeals health care to pay for another massive tax break for the wealthiest and corporations. What the repeal of the individual mandate in the Senate bill means is simple: while the wealthy and corporations get a tax break, middle-class families will get double digit premium increases, 13 million people will lose their coverage, older Americans will get an age tax and $25 billion in Medicare funding will be cut.

The bill passed by the House did not include the repeal of the individual mandate. The House should insist that it stays out. Rep. Brian Fitzpatrick (R-PA) has one opportunity left to take a stand against any inclusion of the individual mandate in the final bill which, if passed with the repeal of the individual mandate, would cause 505,000 people to lose coverage in Pennsylvania including 26,200 in Rep. Fitzpatrick’s district, raise premiums on middle-class families by $2,300 and impose an age tax of up to $1,700 on older Pennsylvanians, and cut $1.2 billion in Medicare funds to Pennsylvania all to pay for tax cuts for the wealthy and corporations.

SENATE REPUBLICANS JUST VOTED TO REPEAL HEALTH CARE — RAISING PREMIUMS BY DOUBLE DIGITS FOR MIDDLE CLASS FAMILIES, RIPPING AWAY COVERAGE FOR 13 MILLION AMERICANS, IMPOSING AN AGE TAX ON OLDER AMERICANS AND GUTTING MEDICARE BY $25 BILLION — ALL TO PAY FOR SPECIAL TAX BREAKS FOR MILLIONAIRES AND BIG CORPORATIONS

Congressional Budget Office: Republican Tax Bill Will Result In 13 Million More Uninsured People. “The number of people with health insurance would decrease by 4 million in 2019 and 13 million in 2027.” [CBO, 11/8/17]

Center For American Progress: Senate Tax Bill Will Result In 505,000 More Uninsured In Pennsylvania, 26,200 More In Rep. Fitzpatrick’s District. [Center for American Progress, 11/16/17, 12/5/17]

CBO: Average Premiums Will Increase By 10 Percent In Most Years Of The Next Decade Due To The Republican Tax Bill. “Average premiums in the nongroup market would increase by about 10 percent in most years of the decade (with no changes in the ages of people purchasing insurance accounted for) relative to CBO’s baseline projections.” [CBO, 11/8/17]

Center For American Progress: Marketplace Premiums For A Typical Middle-Class Family In Pennsylvania Will Rise By $2,300 In 2019. [Center for American Progress, 11/16/17]

CBO: Healthier People Less Likely To Purchase Health Coverage, Raising Costs For Everyone Else. “Those effects would occur mainly because healthier people would be less likely to obtain insurance and because, especially in the nongroup market, the resulting increases in premiums would cause more people to not purchase insurance.” [CBO, 11/8/17]

AARP: Premiums For People Over 50 Would Increase Up To $1,500 Nationally, And Up To $1,700 In Pennsylvania, Because Of Health Care Repeal In The Republican Tax Bill. “The Tax Cuts and Jobs Act as reported by the Senate Finance Committee on Nov. 16, 2017 includes a new provision that would both reduce health care coverage and increase costs for millions of Americans. Older adults ages 50–64 would be at particularly high risk under the proposal, facing average premium increases of up to $1,500 in 2019 as a result of the bill.” [AARP, 11/21/17]

CBO: Republican Tax Bill Would Trigger A $25 Billion Cut To Medicare.“Without enacting subsequent legislation to either offset that deficit increase, waive the recordation of the bill’s impact on the scorecard, or otherwise mitigate or eliminate the requirements of the PAYGO law, OMB would be required to issue a sequestration order within 15 days of the end of the session of Congress to reduce spending in fiscal year 2018 by the resultant total of $136 billion. However, the PAYGO law limits reductions to Medicare to four percentage points (or roughly $25 billion for that year), leaving about $111 billion to be sequestered from the remaining mandatory accounts.” [CBO, 11/14/17]

Center For American Progress: Pennsylvania Would See A $1.2 Billion Cut In Medicare Funds. [Center for American Progress, 11/16/17]

Sen. Marco Rubio (R-FL): Republicans Need To Cut Medicare Next To Pay For Tax Cuts. “‘I analyze this very differently than most,’ Rubio told the crowd. ‘Many argue that you can’t cut taxes because it will drive up the deficit. But we have to do two things. We have to generate economic growth which generates revenue, while reducing spending. That will mean instituting structural changes to Social Security and Medicare for the future,’ the senator said.” [Financial Advisor Magazine, 11/30/17]

Center On Budget And Policy Priorities: “Senate Tax Bill Would Add 13 Million To Uninsured To Pay For Tax Cuts Of Nearly $100,000 Per Year For The Top 0.1 Percent.” “The savings from eliminating the mandate would come entirely from reducing health coverage. For example, the federal government would spend less on premium tax credits because fewer people would sign up for marketplace coverage, less on Medicaid because fewer people would enroll, and less on the tax exclusion for employer-sponsored health insurance because fewer employees would enroll in job-based coverage. These savings are what let Senate leaders make their full corporate rate cut permanent…The benefits of corporate rate cuts go overwhelmingly to high-income households.” [CBPP, 11/15/17]

PASSING ALEXANDER-MURRAY AFTER VOTING FOR REPEAL IS LIKE INSTALLING GUARDRAILS ON THE HIGHWAY AFTER YOUR CAR HAS GONE OVER THE CLIFF

CBO: Passing Alexander-Murray After The Repeal Of The Individual Responsibility Provision Would Not Undo The Damage. “In your letter of November 21, 2017, you asked about the combined effects of simultaneously passing the BHCSA and legislation that would repeal the requirement that most U.S. citizens and noncitizens who lawfully reside in the country have health insurance meeting specified standards. Specifically, you asked if legislation that combined the provisions would change the agencies’ previous estimates of the number of people with insurance coverage or premiums in the nongroup insurance market. In the estimate for the BHCSA, the agencies wrote that, relative to the Summer 2017 baseline, the legislation would not substantially change the number of people with health insurance coverage, on net.” [CBO, 11/29/17]

There Is No Guarantee Alexander-Murray Would Pass The House, Let Alone Become Law. There is no guarantee Alexander-Murray would pass the House, let alone become law. Speaker Ryan dodged questions about its fate in the House. House conservatives called it a “nonstarter.” And President Trump has been all over the map on this issue his word cannot be trusted.

THE LEADING EXPERTS — PATIENT GROUPS, INSURERS, DOCTORS AND HOSPITALS — AND MORE THAN 2,400 FAITH LEADERS AND THE AMERICAN PEOPLE OPPOSE HEALTH REPEAL

American Cancer Society Cancer Action Network, American Diabetes Association, American Heart Association, And 16 More Leading Patient Groups: People With “Serious Health Care Needs” And With Pre-Existing Conditions “May Not Be Able To Afford Coverage.” “Many individuals with serious health care needs, including patients with chronic or major health conditions, who by definition, have a pre-existing condition, may not be able to afford coverage.” [The Hill, 11/28/17]

America’s Health Insurance Plans, American Academy Of Family Physicians, American Hospital Association, American Medical Association, Blue Cross Blue Shield Association, Federation Of American Hospitals: Leading Industry Groups Warn Of “Serious Consequences” Should The Mandate Be Repealed. “As providers of healthcare and coverage to hundreds of millions of Americans, we are committed to assuring everyone has access to a range of high quality, affordable coverage options so they can access the care they need, regardless of pre-existing conditions. To achieve this critical goal, we are urging you to maintain the individual mandate unless and until Congress can enact a package of reforms to adequately assure a balanced risk pool and prevent extraordinary premium increases.” [Letter, 11/14/17]

More Than 2,400 Faith Leaders: “That The Number Of Uninsured Individuals Would Increase By 13 Million By 2025…Violates Our Faith Teaching.” “The individual mandate is critical to keeping individual market coverage affordable and keeping the individual market stable. By repealing the individual mandate, legislation will cause catastrophic losses in health coverage. The CBO estimates that the number of uninsured individuals would increase by 13 million by 2025, which violates our faith teaching.” [Letter, 11/29/17]

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