In this open enrollment season, look for health insurance that looks great

It took Kelly Macauley nearly a year to realize the health plan she bought while shopping for insurance coverage last October didn’t actually have insurance. Sure, red flags popped up along the way, but when she called to complain, she said, he sounded reasonable enough and let her pay her $700 monthly premium.

He said he was told his medical bills were not being paid because the hospital was submitting them incorrectly. That Jericho Shares, the nonprofit that sent him a membership card saying “This is not insurance,” was only the underwriter of his policy, not the actual insurer. That he did not receive a policy welcome packet because the company was saving on paper and passing those savings on to customers.

Then, this summer, the 62-year-old retired teacher who recently moved to South Carolina from the Philadelphia area found out her plan paid just $120 of her hip replacement bill last year, leaving her with a balance of more than $40,000. She said she was assured the procedure would be covered when she shopped for insurance. But it turns out that the plan he bought wasn’t insurance at all but part of the Ministry of Health Care Sharing.

Health care sharing ministries are an alternative to health insurance where members agree to share medical expenses. They are often faith-based and can be cheaper than traditional insurance, although they do not cover their members’ medical bills, the Commonwealth Fund reports.

“It was never mentioned to me,” Macauley said. “I honestly believe I’m buying legitimate medical insurance.”

Beginning Nov. 1, millions of Americans will purchase health insurance through 2023 during a period known as “open enrollment.” Through federal and state insurance marketplaces, consumers can shop for affordable Affordable Care Act-compliant health insurance plans and find out if they qualify for financial assistance.

But experts warn that the rush to buy coverage presents an opportunity to sell people alternative products, such as short-term health plans and health care sharing ministries, which are often cheaper than comprehensive coverage but offer far less protection. While these options themselves are legal, experts warn that misleading marketing can lead consumers to shop for comprehensive coverage in health plans that exclude protection for pre-existing conditions and put patients at risk of large medical bills.

“This is a prime time to look for consumers who are shopping for insurance and mislead them,” said Joann Volk, co-director of Georgetown University’s Center on Health Insurance Reform.

Volk identified the signs of a conversation going the wrong way: if the person selling you a plan starts asking about your health history, or if they refuse to send you information about the plan altogether, or if they agree to provide that information only after you pay them. According to a 2021 secret-shopper report on misinformation marketing practices, which Volk co-authored, one broker incorrectly cited HIPAA, the Patient Privacy Protection Act, as a reason not to share information about health plans.

“Just stuff to make,” Volk said. “If you’re cheating, there are no boundaries.”

In a statement to KHN, Jericho Shares spokesman Mark Hubbard said the organization cannot discuss Macauley’s case without its prior written approval but does not tolerate any misrepresentation or unethical behavior as part of its programs.

Nationwide, lawmakers and regulators are looking at how health care plans are sold. Senate Finance Committee Chairman Ron Wyden, a Democrat from Oregon, is investigating allegations about the marketing of Medicare Advantage plans. And in May, the Centers for Medicare and Medicaid Services noted that complaints about marketing practices for Medicare Advantage and Medicare Prescription Drug Benefit plans rose from 15,497 in 2020 to at least 39,617 in 2021.

Delaware Insurance Commissioner Trinidad Navarro, who chairs the National Association of Insurance Commissioners’ Anti-Fraud Task Force, said, “The number of scams involving health care has increased exponentially.”

Multiple factors are driving the increase, Navarro said. Rising health care prices can drive up costs for regulated health plans, such as those that comply with the Affordable Care Act. Higher costs push more Americans to look for cheaper options that typically don’t offer as much coverage and can confuse consumers. Such plans have expanded under President Donald Trump’s administration, Navarro said.

“I don’t want to sound political,” said Navarro, an elected Democrat, “but the previous presidential administration really pushed skinny plans and alternatives to the ACA, and I don’t necessarily think they understood the fraud that was associated with this plan.”

Finally, Navarro said, because states are the primary regulators of insurance, tamping down health care scams can be like playing whack-a-mole — when one state steps in, scammers move to another to set up shop.

To combat that tactic, Navarro said, insurance regulators around the country have created what he describes as a “confluence page” to share information among themselves about bad actors. For consumers, Navarro said, regulators are talking about creating a public lookup tool for investigating complaints against health insurance brokers, similar to the BrokerCheck tool created by the Financial Industry Regulatory Authority to monitor stockbrokers.

For now, he recommends working with healthcare navigators, who help consumers enroll in plans through the official health insurance marketplace, healthcare.gov. Also, regulators are taking legal action over misleading sales tactics. In August, the Federal Trade Commission won $100 million in refunds for consumers it said were “duped” by fraudulent health plans. Last year, the Massachusetts attorney general won $515,000 in consumer relief from an insurance company accused of deceptive sales practices.

Court filings from October indicate that California’s attorney general is investigating Jericho Share — the health care sharing ministry that Kelly McAuley said she unwittingly bought a plan for — to see if it complies with state requirements for health care sharing ministries.

A spokesman for Jericho Shares, Hubbard, said the company is “responding appropriately” to the attorney general’s investigation.

Macauley reached out to KHN after reading about a June investigation about consumers who said they thought they were buying insurance only to later find out they had been sold memberships in the health care sharing ministry.

Hubbard noted that since that story was published, Jericho Shares automatically issues refunds for new customers within 72 hours of a request within 30 days of signing up, no longer allows “outsourced marketing for enrollment,” and includes member guides and pop-ups. Adds -up. The website states that Jericho Share is a healthcare sharing ministry.

The company responded online to McAuley’s bad review on the Better Business Bureau website, asking for more information about her case. He said he provided that information but never heard back.

After Macauley tried unsuccessfully to cancel his Jericho Share plan with the company directly, he said, he called his credit card company to stop the company from authorizing any more charges. When she described her situation, McAuley said, a sympathetic credit card representative told her, “It’s fraud,” and offered to try to get McAuley back all of her premiums.

Even if that effort succeeds, Macauley will be left with thousands of dollars in medical bills while unknowingly uninsured.

He is again in the market for health insurance and plans to choose a company he has heard of before.

“Whatever the cost,” Macauley said, “I just want to know I really have insurance.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Along with policy analysis and polling, KHN is one of the three main operating programs of the KFF (Kaiser Family Foundation). KFF is a non-profit organization that provides health information to the nation.

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