Judy McGinnis: Health insurance buyer beware
January 28, 2018
What would you think if you bought an egg carton labeled “one dozen” but inside only found one egg? What if you bought a season ski pass and found that it only applied to one green run? Would you feel a bit upset? A bit ripped off?
This feeling of bait and switch will be coming soon to many of those who forego comprehensive, ACA-compliant health insurance plans and opt for new “association” health plans that will be available soon, thanks to an executive order by President Trump, in conjunction with the Department of Labor.
Plans will be targeted to small business owners, and many of these plans will have much lower premiums, for a simple reason. They won't cover as much. Certain essential health benefits such as mental health care, emergency services, maternity and newborn care and prescription drugs can be excluded. Associations can customize their benefits packages to avoid covering expensive treatments for ongoing diseases or new catastrophic ones.
Because plans will not be subject to the same regulations as current ACA insurance plans, the industry will attract unscrupulous vendors. Similar plans have a long history of fraud and abuse that have left employers and employees with hundreds of millions of dollars in unpaid medical bills.
The DOL acknowledged that association health plans had a history of financial mismanagement and abuse. Some plans, it said, "have failed to pay promised health benefits to sick and injured workers while diverting, to the pockets of fraudsters, employer and employee contributions from their intended purpose of funding benefits."
Dozens of court cases and enforcement actions have been taken over more than a decade by federal and state officials who regulate the types of plans Mr. Trump is encouraging, known as association health plans. The Labor Department, itself, has in the past targeted "unscrupulous promoters who sell the promise of inexpensive health benefit insurance, but default on their obligations."
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The department said it now has the authority to prevent such abuses. But former employees say the department's enforcement apparatus had been weakened by budget cuts and could not police compliance adequately in the future, especially if these plans proliferate.
Our representatives in Washington who rubber stamp everything our President does ( I refer to Sena. Gardner and Rep. Tipton) cannot be expected to look out for the interests of vulnerable people looking for cheaper health care. This rule will be implemented without the consumer protections people have come to expect, and families will suffer.
So buyer beware.