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protectourcare
In Fact Sheet

Protect Our Care Praises Biden’s ‘American Rescue Plan’

Along with Delivering Relief to Americans and Fixing Problems with the Vaccine Distribution Rollout, Biden’s Ambitious Plan Will Make Health Care More Accessible and Addresses Racial Disparities

Washington, DC — Following President-elect Joe Biden’s release of his ‘American Rescue Plan,’ Protect Our Care Executive Director Brad Woodhouse issued the following statement:

“We commend President-elect Biden for putting forth a package to address the disaster he will inherit from Donald Trump and his failed leadership. It will take time to fill the steep hole this administration has left us in, but delivering relief into the hands of Americans, fixing Trump’s disastrous vaccine distribution rollout, and getting resources to states and localities are vital to rescuing our nation from a pandemic that has gone on far too long and been far too costly to the American people. Importantly, this package includes crucial provisions to expand health care coverage, make accessing health care more affordable and address racial disparities in coronavirus treatment and outcomes.

“During the entirety of this pandemic, President Trump and Republicans refused to lift a finger to help people get covered or make health care more affordable. In fact, the Trump administration is before the Supreme Court right now trying to rip coverage away; but President-elect Biden is doing the right thing by working to preserve and expand health care coverage and end the pandemic. Congress should move quickly to provide this much needed relief for Americans.”

Sean England
In Fact Sheet, Research

Fact Sheet On Trump Lawsuit To Overturn ACA

With a vacancy on the U.S. Supreme Court, the future of our health care is at stake. On November 10, 2020 — one week after the election — the U.S. Supreme Court will hear oral arguments in California v. Texas, a case that, if successful, would overturn the entire Affordable Care Act (ACA), ending its protections for 135 million Americans with pre-existing conditions and ripping health care away from more than 20 million Americans, all during a raging pandemic. The danger of letting Donald Trump fill the Supreme Court vacancy cannot be overstated. Now, more than ever, Americans’ health care is on the ballot.

If the Affordable Care Act is struck down:

  • GONE: Protections for 135 million Americans with pre-existing conditions. The uninsured rate will increase by 65 percent. 
  • GONE: Medicaid expansion, which covers more than 15 million people. 
  • GONE: Nearly 12 million seniors will have to pay more for prescription drugs because the Medicare ‘donut hole’ will be reopened.
  • GONE: 2.3 million adult children will no longer be able to stay on their parents’ insurance. 
  • GONE: Insurance companies will be able to charge women 50 percent more than men.
  • GONE: Financial assistance that helps 9 million people purchase health care in the marketplace.
  • GONE: Key support for rural hospitals. 
  • GONE: Ban on insurance companies having lifetime caps on coverage.
  • GONE: Requirements that insurance companies cover prescription drugs and maternity care.
  • GONE: 60 million Medicare beneficiaries will face higher costs and disruptions to their medical care. 

Thanks To The Republican Lawsuit, More Than 20 Million People Could Lose Their Coverage

  • 20 million people could lose coverage. The Center for American Progress estimates more than 20 million people could lose coverage during an ever-worsening global pandemic if the ACA is overturned.
  • The uninsured rate would increase by at least 65 percent. According to pre-pandemic estimates from the Urban Institute, the number of uninsured Americans would increase from 30.4 million to 50.3 million without the ACA, representing a 65 percent increase in the uninsured rate. As the uninsured rate swells, so will the amount of uncompensated care, which Urban predicts will grow by at least 82 percent.
  • States would lose important federal health care funding — an estimated reduction of $135 billion in the first year. The Urban Institute estimates that a full repeal of the ACA would reduce federal spending on Medicaid/CHIP care and Marketplace subsidies by $135 billion, or 34.6 percent in the first year.
  • Millions of children could lose their coverage. Almost three million children nationwide gained coverage thanks to the ACA. If the law is overturned, many of these children will lose their insurance.
  • The Black uninsured rate would spike to 20 percent. According to the Center on Budget and Policy Priorities, the ACA helped lower the uninsured rate for nonelderly African Americans by more than one third between 2013 and 2016 from 18.9 percent to 11.7 percent. Without the ACA, the uninsured rate for black Americans would spike to 20 percent.
  • 5.4 million Latinos would lose coverage. The percentage of people gaining health insurance under the ACA was higher for Latinos than for any other racial or ethnic group in the country. According to a study from Families USA, 5.4 million Latinos would lose coverage if the lawsuit succeeds in overturning the ACA.

Republicans Want To Put Insurance Companies Back In Charge, Ending Protections For The 135 Million People With A Pre-Existing Condition

  • According to a recent analysis by the Center for American Progress, roughly half of nonelderly Americans, or as many as 135 million people, have a pre-existing condition. This includes:
    • 44 million people who have high blood pressure
    • 45 million people who have behavioral health disorders
    • 44 million people who have high cholesterol
    • 34 million people who have asthma and chronic lung disease
    • 34 million people who have osteoarthritis and other joint disorders

Republicans Want To Give Insurance Companies The Power To Deny Or Drop Coverage Because Of A Pre-Existing Condition

Conditions That Could Cost You Your Care:

  • AIDS/HIV
  • Alcohol/drug Abuse
  • Cerebral Palsy
  • Cancer
  • Heart Disease
  • Diabetes
  • Epilepsy
  • Kidney Disease
  • Severe Epilepsy
  • Sleep Apnea
  • Pregnancy
  • Muscular Dystrophy
  • Depression
  • Eating Disorders
  • Bipolar Disorder
 Jobs You Could Be Denied Coverage Because Of:

  • Active military personnel
  • Air traffic controller
  • Body guard
  • Pilot
  • Meat packers
  • Taxi cab drivers
  • Steel metal workers
  • Law enforcement 
  • Oil and gas exploration
  • Scuba divers
 Medications That You Could Be Denied Health Care For Taking:

  • Anti-arthritic medications
  • Anti-diabetic medications (including insulin)
  • Anti-cancer medications
  • Anti-coagulant and anti-thrombotic medications
  • Medication for autism
  • Anti-psychotics
  • Medications for HIV/AIDS
  • Growth hormone
  • Medication used to treat arthritis, anemia, and narcolepsy
  • Fertility Medication

Before the Affordable Care Act, insurance companies routinely denied people coverage because of a pre-existing condition or canceled coverage when a person got sick. Now insurance companies could have the license to do this again. 

  • A 2010 congressional report found that the top four health insurance companies denied coverage to one in seven consumers on the individual market over a three year period. 
  • A 2009 congressional report found that some of the largest insurance companies had retroactively canceled coverage for 20,000 people over the previous five year period.
  • The Kaiser Family Foundation estimates that 54 million people, or 27% of adults aged 18 to 64, have a condition that would have been grounds for coverage denial in the pre-ACA marketplace. 
  • An analysis by Avalere finds that “102 million individuals, not enrolled in major public programs like Medicaid or Medicare, have a pre-existing medical condition and could therefore face higher premiums or significant out-of-pocket costs” if the Trump-GOP lawsuit is successful.

Coronavirus Could Now Be Considered A Pre-Existing Condition. Without the ACA, millions of Americans who have contracted the coronavirus would likely be deemed as having a pre-existing condition and be at the mercy of their insurance companies who could refuse to pay for needed care. Because of Donald Trump’s failure to respond to the coronavirus crisis, the number of Americans with coronavirus is only increasing, with hundreds of thousands of cases still being reported every week. 

Republicans Want To Give Insurance Companies The Power To Charge You More, While Their Profits Soar

  • 138 Million Americans Could Once Again Have To Pay For Preventive Care. Because of the ACA, health plans must cover preventive services — like flu shots, cancer screenings, contraception, and mammograms – at no cost to consumers. This includes nearly 138 million Americans, most of whom have employer coverage.
  • Premium Surcharges Could Once Again Be In The Six Figures. Thanks to the Republican lawsuit, insurance companies could once again charge people more because of a pre-existing condition. The House-passed repeal bill had a similar provision, and an analysis by the Center for American Progress found that insurers could charge up to $4,270 more for asthma, $17,060 more for pregnancy, $26,180 more for rheumatoid arthritis and $140,510 more for metastatic cancer.
  • Women Could Be Charged More Than Men For The Same Coverage. Prior to the ACA, women were often charged premiums on the nongroup market of up to 50 percent higher than they charged men for the same coverage. 
  • People Over The Age of 50 Would Face A $4,000 “Age Tax.” Thanks to the Republican lawsuit, insurance companies could charge people over 50 more than younger people. The Affordable Care Act limited the amount older people could be charged to three times more than younger people. If insurers were to charge five times more, as was proposed in the Republican repeal bills, that would add an average “age tax” of $4,124 for a 60-year-old in the individual market, according to the AARP.
  • Nine Million People In The Marketplaces Would Pay More For Coverage. If the ACA is overturned, consumers would no longer have access to tax credits that help them pay their marketplace premiums, meaning roughly nine million people who receive these tax credits to pay for coverage would have to pay more.
  • Seniors Would Have To Pay More For Prescription Drugs. Thanks to the Republican lawsuit, seniors would have to pay more for prescription drugs because the Medicare “donut” hole would be reopened. From 2010 to 2016, “More than 11.8 million Medicare beneficiaries have received discounts over $26.8 billion on prescription drugs – an average of $2,272 per beneficiary,” according to a January 2017 Centers on Medicare and Medicaid Services report.
  • 60 Million Medicare Beneficiaries Could Face Higher Costs. In addition to paying more for preventive care and prescription drugs, Medicare beneficiaries could face higher premiums without the cost-saving measures implemented under the ACA. If the Republican lawsuit is successful, seniors would also face less coordinated care. 

Republicans Want To Give Insurance Companies The Power To Limit The Care You Get, Even If You Have Insurance Through Your Employer

  • Insurers Could Reinstate Lifetime and Annual Limits On 109 Million Privately Insured Americans. Repealing the Affordable Care Act means insurance companies would be able to impose annual and lifetime limits on coverage for those insured through their employer or on the individual market. In 2009, nearly 6 in 10 (59%) covered workers’ employer-sponsored health plans had a lifetime limit, according to the Kaiser Family Foundation. 
  • Insurance Companies Would Not Have to Provide the Coverage You Need. The Affordable Care Act made comprehensive coverage more available by requiring insurance companies to include “essential health benefits” in their plans, such as maternity care, hospitalization, substance abuse care and prescription drug coverage. Before the ACA, people had to pay extra for separate coverage for these benefits. For example, in 2013, 75 percent of non-group plans did not cover maternity care, 45 percent did not cover substance abuse disorder services, and 38 percent did not cover mental health services. Six percent did not even cover generic drugs.
  • Large Employers Could Choose to Follow Any State’s Guidance, Enabling Them Put Annual and Lifetime Limits on Their Employees’ Health Care. Without the ACA’s definition of essential health benefits (EHB), states could eliminate them altogether. Large employers could choose to apply any state’s standard, making state regulations essentially meaningless. Because the prohibition on annual and lifetime limits only applies to essential health benefits, this change would allow employers to reinstate annual and lifetime limits on their employees’ coverage.

Republicans Want To End Medicaid Expansion

  • More Than 15 Million People Enrolled Through Medicaid Expansion Would Lose Coverage. Before the coronavirus crisis, roughly 15 million people were enrolled through Medicaid expansion. 
  • Medicaid Plays A Critical Role In The Coronavirus Response. An estimated 12 million people have lost their employer-sponsored coverage as a result of the pandemic, and states are reporting steep increases in Medicaid enrollment. The Center on Budget and Policy Priorities found that roughly 6 million people enrolled in Medicaid between February and July 2020.  
  • Access To Treatment Would Be In Jeopardy For 800,000 People With Opioid Use Disorder. Roughly four in 10, or 800,000 people with an opioid use disorder are enrolled in Medicaid. Many became eligible through Medicaid expansion.
  • Key Support For Rural Hospitals Would Disappear, with state spending on Medicaid/CHIP falling by $9.6 billion. 
Sean England
In Fact Sheet

Lower Costs, Better Care: House Dems Unveil Sweeping Health Bill

After winning the Midterm elections by vowing to fight for Americans’ health care, Democrats in the House of Representatives are making good on their promises by introducing sweeping legislation to achieve lower costs and better care. While House Democrats take concrete steps to make our health care system work better for the American people, the Trump administration and its Republican allies are doing just the opposite: proposing to cut Medicare and Medicaid by $2 trillion, gutting protections for preexisting conditions, and throwing the full weight of the Justice Department behind overthrowing the Affordable Care Act in the Texas lawsuit.

This bill is only the start for the Democrats’ agenda which will ultimately include further efforts to rein in prescription drug costs and end surprise hospital bills. Here’s how the proposed legislation will work for Americans:

Lower Health Care Costs. The House bill would reduce health care premiums and deductibles, expand eligibility for financial assistance that helps consumers afford coverage, and expand access to affordable health care by guaranteeing affordable care options.

  • Coverage for less than ten percent of your income. Under the bill, nearly all Americans would be guaranteed an option to purchase health care for less than 10 percent of their income.
  • Financial assistance for more people. Premium tax credits would be made available to more middle class Americans, including those with incomes above 400 percent of the federal poverty line or roughly $100,400 for a family of four.
  • Lowering premiums. By creating a national reinsurance program the House legislation would help further reduce premiums.

Better Care For More People. The bill would restrict insurance companies’ ability to sell plans that gut circumvent important consumer protections. By helping to lower costs, the House bill would also expand access to comprehensive, affordable care for even more people.

  • Lowering premiums, deductibles, or both for more than 13 million people currently insured and providing lower cost options for 12 million uninsured people. In all, the bill’s extended tax credits, reinsurance programs and premium assistance would cut premiums for all ACA-compliant plans sold on the individual market, reducing premiums or deductibles for 13 million with individual market coverage and creating lower cost options for 12 million uninsured people eligible for coverage through the marketplace.
  • Protecting people with pre-existing conditions. The legislation would stop the Trump administration’s plans to allow insurance companies to sell junk plans that deny people with pre-existing conditions coverage or charge them more.
  • Guaranteeing that insurance companies cover basic health services. The bill would also prevent the Trump administration from weakening requirements that all insurance cover essential health benefits, such as prescription drug coverage, hospital care, and maternity coverage.
  • Taking power away from insurance companies and gives it back to patients. While the Trump administration gives insurance companies the power to flood the market with junk plans and rewards them with massive tax breaks, this bill reinstates important protections for American consumers, giving power back to patients.

End Sabotage. Since taking office, the Trump administration has worked relentlessly to sabotage Americans’ health care, expanding access to junk plans that allow insurance companies to deny coverage to patients with pre-existing conditions and slashing funding to help people sign up for comprehensive, affordable care.

  • Restoring funding for education. The House bill would restore marketing funding for heatlh care sold through the marketplace, which the Trump administration has cut by 90 percent since taking office.

Restoring funding for groups that help people sign up for coverage. Funding for health navigator groups that help people sign up for comprehensive care, which has been cut by 77 percent since the President Trump took office, would also be restored.

Sean England
In Fact Sheet

The Republican War On Medicaid

President Trump and Republicans in Congress have waged a relentless war on Medicaid. Their war on Medicaid is a war on children, seniors, people with disabilities, rural Americans, those fighting the opioid crisis, our schools, and everyone else who benefits from Medicaid.  

FRONTAL ATTACK — REPUBLICANS HAVE REPEATEDLY TRIED EVISCERATING MEDICAID

Despite repeatedly promising not to cut Medicaid when he ran for president in 2017, President Trump’s latest budget  called for $1.5 trillion in cuts to Medicaid. Trump’s lawsuit to fully repeal the Affordable Care Act would end Medicaid expansion, kicking 12.7 million who depend on the program off their insurance.

With the support of the Trump Administration, House Republicans in 2017 voted to repeal the ACA — the American Health Care Act (AHCA) — which would have cut Medicaid by $834 billion and turned it into a per capita program. The Senate repeal bill — Graham-Cassidy —  would have slashed Medicaid funding by $4 trillion over 20 years.

SABOTAGE ATTACK — ONEROUS REQUIREMENTS

When they are not calling for dramatic cuts to Medicaid, Republicans are finding other ways to sabotage the program. For instance, Republicans in state after state are proposing illegal and burdensome “work requirements” which do nothing but take health care away from people who need it. Medicaid work requirements are blatantly designed to strip health care away from low-income Americans. Thankfully, they have now been declared illegal by multiple courts. Republican governors now want to appeal these decisions.

Despite these court decisions, President Trump’s 2020 budget proposed a nationwide work requirement which experts estimate will cause up to 4 million people to lose coverage, mostly due to paperwork and red tape. More than 18,000 people lost their Medicaid in Arkansas because of the work requirement the courts have now overturned.

In November’s elections, voters moved to expand Medicaid in three states and elect pro-Medicaid governors in even more. Now, Republlican officials are doing everything in their power to deny voters’ will in states that elected to expand Medicaid and prevent Medicaid expansion initiatives in states now starting to consider them. Just last week the Trump administration approved a request from Utah to cap its Medicaid enrollment, fundamentally restricting the number of people who can access life-saving health care.

WHO BENEFITS FROM THE GOP WAR ON MEDICAID? THE WEALTHY AND BIG CORPORATIONS

In 2017, President Trump signed a $1.5 trillion tax bill that disproportionately benefits the wealthy and that is already padding health company’s profits. How do Republicans plan on paying for it? Former Speaker Ryan’s answer left no doubt: “Frankly, it’s the health care entitlements that are the big drivers of our debt.” In an attempt to pay for these tax cuts, last April, House Republicans passed a balanced budget amendment that would slash Medicaid funding by $114 billion in a single year alone. President Trump’s fiscal 2020 budget called for $1.5 trillion in cuts over ten years.

The Republican plan is clear: give companies like drug giant Pfizer a $563 million tax benefit, and make low and middle income Americans pay the price.

WHO GETS HURT FROM THE GOP WAR ON MEDICAID? PRETTY MUCH EVERYONE ELSE.

  • Children & Families. Roughly 34.9 million children in the United States are enrolled in Medicaid or the Children’s Health Insurance Program (CHIP). Nationally, nearly 2 in 5, or 39% of children in America have health insurance through Medicaid, as do 17 Percent of parents. 49 percent of births are covered by Medicaid.
  • Seniors. More than 6.9 million American seniors have Medicaid coverage. More than 8.5 million Americans ages 50 to 64 have health coverage through Medicaid. Medicaid covers 6 in 10 nursing home residents.
  • People with disabilities. Nearly 8.7 million adults enrolled in Medicaid have a disability. Of this group, only 43 percent qualify for social security income. More than 1 in 3 adults under age 65 enrolled in Medicaid lives with at least one disability. Medicaid covers 45 percent of nonelderly adults with disabilities, including adults with physical disabilities, developmental disabilities, brain injuries, and mental illness.
  • People in rural areas. The ACA has expanded access to health care to nearly 1.7 million rural Americans who have gained coverage through the Medicaid expansion, not only playing a central role in improving rural communities’ health, but also supporting these communities’ economic well-being. Medicaid covers nearly 24 percent of rural Americans, 45 percent of rural children, 15 percent of rural seniors, and pays for 51 percent of rural births. The uninsured rate in rural areas in states that expanded Medicaid has dropped by a median of 44 percent since expansion.
  • Fighting the opioid crisis. More than half of people with an opioid use disorder earn incomes below 200 percent of the federal poverty line. In 2014, Medicaid paid for 25 percent of all addiction treatment nationwide. It is estimated that Medicaid expansion covers four in ten people with an opioid use disorder.
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]

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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.

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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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