How they did it: Reporting on junk health insurance plans

Early in May, ProPublica health care reporter Jenny Deam wrote about the financial ruin that often results when unknowing consumers enroll in short-term health insurance plans. Her article of more than 3,000 words, “He Bought Health Insurance for Emergencies. Then He Fell Into a $33,601 Trap,” is an excellent example for any journalist looking to cover the complex world of health insurance plans that do not comply with the requirements of the Affordable Care Act (ACA), otherwise known as Obamacare.

Maya Miller, an engagement reporter with ProPublica’s Local Reporting Network, also contributed.

As the article notes, the Trump administration’s efforts to deregulate health insurance led to the proliferation of short-term health plans, boosting health insurers’ profits while leaving patients with unexpected bills. Deam also explained the steps the Biden administration has taken to bolster ACA-compliant plans offered through and the state health insurance marketplaces. We reported on those efforts in February, in March and in April.

Any article on health insurance plans that fail to comply with the ACA needs at least one solid patient anecdote, and Deam included stories from two patients who incurred serious financial charges. When reporting on these plans, journalists will learn that it’s a challenge to identify patients who suffered financial harm from these plans.

To find patient anecdotes, Deam and Miller read through Reddit posts and GoFundMe pages and asked patient advocacy groups for sources, Deam explained in an email.

In addition, she offered a warning to journalists: When writing about health plans that do not comply with the ACA’s requirements, you’re likely to get criticism for those who promote these plans. “I got a coordinated pushback from short term insurance groups,” she wrote. “So be prepared.”

Another important tip that she offered was to show how much some non-ACA compliant plans generate in revenue. “I felt it was really key to look at the financial reports to quantify just how much money they brought in in premiums versus what they paid out in claims,” she noted. “I did the calculations myself but backstopped my math and methodology with two former insurance executive sources.”

Financial reports 

One of the strengths of the article is the analysis that Deam based on 2020 insurance company financial filings from the National Association of Insurance Commissioners. The analysis showed, for example, that insurers offering these plans typically kept higher percentages of premiums collected than plans that comply with the ACA.

“For instance, Golden Rule, a United Healthcare subsidiary and the nation’s largest issuer of short-term plans, collected $1.6 billion in premiums in 2020 from its various offerings, up from $1.47 billion the previous year,” she wrote. Of that amount, the company paid about 58% toward members’ medical claims in 2020, down from roughly 62% that went to claims in 2019, she added. For comparison, the ACA requires health insurers to pay out 80% to 85% of what they collect in premiums.

“One notable filing was that of Florida-based American Financial Security Life Insurance Company, which underwrites short-term and other noncompliant plans,” Deam added. “Last year, according to its filings, AFSLIC paid just 26% in health and accident claims out of the $31 million it collected in premiums. It is nearly the exact opposite of what the ACA demands of insurers.”

Patient anecdotes 

In the top of her article, Deam focused on Cory Dowd, a self-employed event planner who was uninsured in the spring of 2019 just as the individual market for health insurance was changing under the Trump administration’s attempts to dismantle the ACA. Those efforts led insurers to offer “more choices at cheaper prices,” as Deam explained.

“Dowd is well-educated and knew more than most about how traditional health insurance works,” she wrote. “But even he did not understand the extent to which insurers could offer plans that looked like a great deal but were stuffed with fine print that allowed companies to deny payment for routine medical events.”

Health policy experts and consumer advocates call short-term plans “junk insurance” because they can deny coverage for consumers who have preexisting conditions, exclude payments for common treatments and impose limits on how much they pay for care, she added.

In a blog post last year, we wrote about a report from the Congressional Democrats on the Committee on Energy and Commerce (E&C) that said short-term, limited-duration insurance plans threaten the health and financial well-being of American families.

Deam noted that the E&C report showed that at least 3 million consumers had short-term limited duration plans in 2019, the last year for which information was available. That was a 27% jump from the previous year, when deregulation began in earnest, the investigation found.

For a good explanation of what short-term plans will not cover, see, “What to Know Before You Buy Short-Term Health Insurance,” by health care reporter Margot Sanger-Katz for The New York Times. Some of these plans will not cover prenatal or maternity care, mental health or prescription drugs. Some plans will deny coverage if a consumer has a pre-existing condition, and some plans will not cover hospitalizations if the hospital stay begins on a weekend, Sanger-Katz wrote.

When buying health insurance, it can be difficult to avoid short-term plans. “If you buy insurance from a broker, it may not be obvious whether a given plan will be a short-term plan or a more comprehensive Obamacare-compliant plan, unless you ask,” Sanger-Katz wrote. “Both insurers and brokers who help connect people with the plans will have an incentive to sell them.”

Shopping for health insurance online makes it difficult for consumers to know which plans are ACA-compliant and which are not. One way to know that a health plan complies with the requirements of Obamacare is to buy a plan at or through one of the state-based ACA marketplaces.

Deam stressed this point: “All companies selling short-term plans have to do is acknowledge that they are not ACA-compliant and may not cover everything — a disclosure the insurers insist they do.”

For more information on health insurance that does not comply with the requirements of the ACA, see the report, Under-Covered: How “Insurance-Like” Products Are Leaving Patients Exposed. This report from the Leukemia and Lymphoma Society and 29 other organizations representing patients, explains how non-ACA-compliant plans not only expose consumers to financial risks but also segment the individual market risk pool and unnecessarily inflate health insurance premiums for all.

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