Disputes, denials mar plans
Trump-backed short-term health policies have problematic history
NEW YORK—The short-term medical plans promoted in President Donald Trump’s new executive order on health care have a long history of customer disputes over pre-existing conditions and denied claims—just the sort of scenarios that were being weeded out by Obamacare.
The Affordable Care Act pushes Americans to buy comprehensive longterm coverage; the Obama administration limited short-term plans to three months and prevents them from being extended. The temporary plans are geared toward people who are between jobs or considering retirement.
But on Oct. 12, Trump directed his department heads to consider allowing the policies to last almost a year and to make them renewable, a move that could undermine Obamacare by dividing the insured between cheaper healthy customers and those with costly ailments.
The short-term plans have attracted as many as 1 million people, some of whom were left swimming in debt when their health took a turn. The federal government flagged the plans at least as far back as 1992, when a General Accounting Office report found they’d left nearly 400,000 members and their beneficiaries with $123 million in unpaid medical claims in a four-year span.
Take Dawn Jones, a former product-liability attorney at King and Spalding in Atlanta who left the firm in 2014 to start her own practice. She bought a shortterm plan from Golden Rule Insurance, a unit of UnitedHealth Group Inc., so she’d be covered between jobs, according to court documents. Then, she was diagnosed with breast cancer.
Despite showing evidence she was unaware of the cancer when she bought the policy, the insurer didn’t pay for Jones’s treatment, leaving her with a $400,000 medical bill, according to a complaint she filed against the company in September 2016. Jones claimed the insurer breached its duty to provide coverage “for her medically necessary, life-saving breast cancer treatment.”
“Only after Golden Rule had collected its full six-months of premiums from plaintiff, did it deny all claims related to her breast cancer diagnosis and treatment,” her lawyer wrote in the complaint.
But the judge sided with Golden Rule and dismissed the case in August, finding the policy agreement clearly stated that preexisting conditions wouldn’t be covered, even if the customer was unaware of the condition. Jones wasn’t diagnosed until after she bought her policy. Neither she nor her lawyer returned a call for comment.
Tracey Lempner, a UnitedHealth spokeswoman, had no comment.
Avoiding such scenarios under Obamacare meant penalizing Americans who didn’t buy insurance and forcing insurers to accept customers regardless of preexisting conditions, among other rules. That has increased costs for healthy people, many Republicans have claimed.
The short-term plans would create another option outside of the ACA, and would not be “subject to costly Obamacare mandates and rules,” according to a summary of Trump’s directive.
The short-term plans “are an unfortunate end-run around what the ACA was supposed to do,” said Rachel Geman, an attorney who sued another insurer over the denial of her client’s claims. “It seems logical that we’ll have more underlying problems and more lawsuits by expanding these types of plans.”