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House Democrats Investigate Trump-Backed Short-Term Health Plans

House Democrats Investigate Trump-Backed Short-Term Health Plans

(Bloomberg) -- House Democrats sent letters to 12 insurance companies seeking information about health coverage they sell that critics refer to as “junk plans.”

President Donald Trump’s administration last year expanded the availability of short-term, limited-duration health plans. Companies that received letters Wednesday from House Energy and Commerce Committee Chairman Frank Pallone of New Jersey and other committee leaders include Anthem Inc., UnitedHealth Group Inc., Health Insurance Innovations Inc. and closely held Cambia Health Solutions.

Health Insurance Innovations, an insurance brokerage that touts a cloud-based technology platform, saw its shares plunge 17 percent, giving it a market value of roughly $458 million. Anthem and UnitedHealth, who rank among the largest health insurers in the U.S., were each higher by more than 2 percent in afternoon trading.

“Many consumers are being misled to believe that these plans comply with the patient protections of the Affordable Care Act," Pallone said at a conference of health-insurance plans on Wednesday.

Representatives of the companies couldn’t immediately be reached for comment.

The lawmakers want to know how companies market the short-term plans, what percentage of applicants are denied coverage, and what brokers who sell the insurance are paid. They also asked for plan applications and underwriting documents.

The Trump administration has promoted short-term health plans as less-expensive alternatives to coverage purchased through the Affordable Care Act, though the plans do not have to provide the same level of benefits as those that comply with the 2010 health law. ACA proponents fear short-term plans will pull healthier people out of the law’s markets, leaving a higher proportion of sick people in those markets and leading to higher premiums.

An Urban Institute study earlier this year found that brokers received higher commissions when selling short-term plans than ACA-compliant plans.

“Obamacare is only for sick people,” one broker told the report’s authors.

Brokers selling these plans often decline to provide written information when asked by potential consumers to do so, the report found.

--With assistance from John Tozzi.

To contact the reporters on this story: Anna Edney in Washington at aedney@bloomberg.net;Polly Mosendz in New York at pmosendz@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett

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