- Democratic leaders in Congress are sounding an alarm about possible junk insurance plans being sold on the individual market.
- In a Tuesday letter to Ted Nickel, president of the National Association of Insurance Commissioners, four top Democrats asked for state insurance regulators’ help in combating so-called “skinny” plans that claim to be compliant with the Affordable Care Act (ACA) but don’t meet the law’s requirements, such as protection for people with pre-existing conditions and essential health benefits.
- The lawmakers — House Energy and Commerce ranking member Frank Pallone of New Jersey, House Ways and Means ranking member Richard Neal of Massachusetts, Senate Finance ranking member Ron Wyden of Oregon and Senate HELP ranking member Patty Murray of Washington — also want to know how state regulators will ensure consumers have what they need to make informed decisions on plan choice.
“We are writing to express concern regarding recent reports of companies offering products on the individual market that may not comply with federal law, and which appear to put consumers at great financial risk,” the Democrats write. “The Trump Administration’s efforts to sabotage the health care system appear to have created opportunities for unscrupulous actors to sell stripped-down insurance plans that could leave unwitting consumers on the hook for thousands of dollars in healthcare costs.”
The letter underscores the increased financial risks consumers face following President Donald Trump’s October executive order rolling back plan requirements. Consumers in catastrophic health plans with high deductibles may put off care, and their out-of-pocket costs are typically high.
The order allows small businesses and groups of people to band together and purchase insurance as an association. These association health plans, or AHPs, don’t have to meet ACA requirements, such as the prohibition on lifetime limits.
The order also expands the use of short-term plans, which are more loosely regulated, and lets insurers sell across state lines.
In addition to the NAIC, the lawmakers sent letters to Xpress Healthcare and Apex Management Group — two companies reportedly selling skinny plans. In those, the Democrats seek information on whether the firms sell slimmed-down plans, a written explanation of how the products are not insurance and therefore not subject to ACA requirements and any consumer complaints regarding basic healthcare services.
They also question the companies’ legal status to sell plans in the individual market. “Apex Management Group appears to be selling these insurance policies across the country, and your company has reportedly claimed that it does not need approval from state regulators to sell the plans,” one of the letter reads. “Apex Management Group has reportedly claimed ‘this is not insurance.’”