Insurance Vultures Are Still Selling ‘Junk Policies’
Where the heck are the regulators? Eric Lach at TPM tips off readers to what one health insurance company is doing to fool confused consumers into buying junk policies:
Georgene Mortimer, who runs a winery and lives in Hilton Head, S.C., was recently having trouble accessing the online health insurance exchange. So she decided to check in with the local insurance agent who in 2010 had sold her an individual health insurance policy from a company named USHealth Group. It didn’t take long for Mortimer to realize something was off.
“She started to basically tell me how bad the exchanges are, and that the exchanges are only for the very sick people,” Mortimer told TPM in an interview last week. “And she said, ‘Have you had cancer, heart attack, you or your husband?’ And I said no. And she said, ‘Good, because if you said yes, I would have had to recommend the exchanges.'”
The agent then proceeded to offer Mortimer a product that she touted as not meeting the minimum coverage requirements set by the Affordable Care Act (ACA). The agent strongly recommended that Mortimer sign up before Jan. 1, and said that she could lock her premiums in for three years.
“I said, I thought that non-compliant ACA policies can’t be sold,” Mortimer said. “She said, ‘we can still sell ACA non-compliant plans, but we can’t compete on the exchange.’ And I didn’t know — I didn’t think that was possible.”
The Affordable Care Act was designed to make sure all Americans had a certain level of insurance. But TPM has learned that USHealth Group is actively telling consumers that they don’t need that minimum level. In fact, company representatives are telling people they’d be better off without it. And the company may be just one player in a larger industry trend, where companies see non-ACA compliant plans, like the so-called fixed benefit coverage marketed by USHealth Group, as a business opportunity.
It’s quite possible that this grift falls just outside of illegal, given the loophole-laden set of strictures that pass for “regulations.” But it’s also possible that what USHealth Group is doing is outright illegal, and agencies that are already overextended and now dealing with the insidious “sequester” just can’t enforce the law. In a just nation, someone (or ones) on the sales end would be thrown in the slammer for a long stretch.