October 16, 2019

Warner & Kaine Inquire About Effects of "Junk Plans" on Virginians with Pre-Existing Conditions

~ Senate will soon vote on whether to protect Americans with preexisting conditions against discrimination by insurance companies and the Trump Administration pushing “junk” insurance plans ~

WASHINGTON – Today, U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) requested information from Virginia’s insurance commission on how the Trump Administration’s push for “junk” health insurance plans is affecting protections for Virginians with preexisting conditions. The “junk plans,” which are permitted to discriminate against Americans with preexisting conditions such as diabetes, asthma and cancer, are part of the Trump Administration’s overall effort to undermine the success of the Affordable Care Act and eviscerate protections for people with preexisting conditions. Senate Democrats, led by Sen. Warner, will force a vote on the Senate floor before the end of the month to overturn the Trump Administration’s rule on junk plans and protect people with preexisting conditions. 

“We have heard concerning reports that individuals nationwide – particularly Americans with preexisting conditions – are unknowingly enrolling in these deceptively marketed junk plans that fail to cover many essential health care services,” wrote the Senators in today’s letter to the State Corporation Commission (SCC). “Just this month, Bloomberg reported Arizona resident David Diaz unknowingly purchased a short-term health plan that did not cover preexisting conditions and placed ambiguous limits on emergency room care and other essential health care services. His family has been left with hundreds of thousands of dollars in medical debt. The Washington Post similarly reported on Jesse Lynn, who purchased a short-term health plan not realizing his back problem would be considered a preexisting condition. Jesse’s insurance company refused to cover his care – forcing his family into bankruptcy. No family should be forced into bankruptcy because of a pre-existing medical condition or obscure coverage limits on care.”

A rule issued by the U.S. Department of Health and Human Services (HHS) under the Trump Administration allows states to ignore federal consumer protections and use taxpayer dollars to subsidize junk insurance plans that cover less and cost more. Additionally, under this rule, states can give insurance companies the green light to discriminate against Americans with preexisting conditions by increasing costs, limiting coverage, or denying coverage altogether.

The Senators continued, “The Patient Protection and Affordable Care Act (ACA) established clear protections to prohibit insurance companies from discriminating against individuals with preexisting conditions and also required insurers to spend a minimum amount of their customer’s premium dollars on medical care. We are concerned the short-term health plans HHS has touted gut these protections and empower insurance companies to deny coverage to individuals with preexisting conditions, place arbitrary coverage limits on essential health care services and charge individuals more for services such as mental health care and maternity care.”

In their letter to SCC Commissioners Mark Christie, Judith Williams Jagdmann, and Patricia West, the Senators cited a study by the National Association of Insurance Commissioners that found that junk plans spend only 39 percent of patient premiums on medical care, whereas insurance plans under the ACA are required to spend at least 80 percent of these premiums on medical care. They also requested answers to the following questions regarding the effect of junk plans on Virginians:

  1. How many Virginia residents are currently enrolled in short-term limited-duration insurance plans?
  2. Has the Commission received complaints from Virginia residents regarding the marketing practices of such plans? If so, summarize the substance of the complaints and the number of complaints the Commission has received. 
  3. How is the Commission working to ensure that individuals obtain quality, comprehensive coverage during the upcoming open enrollment period?
  4. Has the Commission taken any enforcement actions against companies that have mislead consumers as to what their plans will cover?
  5. How is the Commission collaborating with other states to limit the proliferation of junk plans and ensure that individuals have access to both the necessary information and comprehensive coverage they need?

Sens. Warner and Kaine have long fought against the Trump Administration’s efforts to dismantle our nation’s health care law. Two weeks ago, Sens. Warner and Kaine urged the HHS and the Centers for Medicare & Medicaid Services (CMS) to limit the proliferation of junk plans. Additionally, they introduced a Congressional Review Act resolution led by Sen. Warner earlier this year to stop the Trump Administration from promoting junk plans, and Sen. Warner filed a discharge petition last month that will force the Senate to vote before November 12 on whether to roll back the rule allowing these harmful changes.

The letter text can be found below and a PDF copy is available here.

October 16, 2019

 

Mark C. Christie                                 

Commissioner                                    

State Corporation Commission          

P.O. Box 1197                                     

Richmond, Virginia 23218      

           

Judith Williams Jagdmann

Commissioner

State Corporation Commission

P.O. Box 1197

Richmond, Virginia 23218

 

Patricia L. West

Commissioner

State Corporation Commission

P.O. Box 1197

Richmond, Virginia 23218

 

Dear Commissioners Christie, Williams Jagdmann and West:

We write to express our concern with recent reports on the expanded use of short-term limited-duration insurance (STLDI) “junk plans” that weaken protections for Americans with preexisting conditions and increase costs for millions more. As you are likely aware, the U.S. Department of Health and Human Services has made a series of recent changes to increase enrollment in short-term health plans. We have heard concerning reports that individuals nationwide – particularly Americans with preexisting conditions – are unknowingly enrolling in these deceptively marketed junk plans that fail to cover many essential health care services. 

Just this month, Bloomberg reported Arizona resident David Diaz unknowingly purchased a short-term health plan that did not cover preexisting conditions and placed ambiguous limits on emergency room care and other essential health care services. His family has been left with hundreds of thousands of dollars in medical debt. The Washington Post similarly reported on Jesse Lynn who purchased a short-term health plan not realizing his back problem would be considered a preexisting condition. Jesse’s insurance company refused to cover his care – forcing his family into bankruptcy. No family should be forced into bankruptcy because of a preexisting medical condition or obscure coverage limits on care.

The Patient Protection and Affordable Care Act (ACA) established clear protections to prohibit insurance companies from discriminating against individuals with preexisting conditions and also required insurers to spend a minimum amount of their customer’s premium dollars on medical care. We are concerned the short-term health plans HHS has touted gut these protections and empower insurance companies to deny coverage to individuals with preexisting conditions, place arbitrary coverage limits on essential health care services and charge individuals more for services such as mental health care and maternity care. A recent study released by the National Association of Insurance Commissioners found that such plans spend just 39 percent of patient premiums on medical care. In contrast, insurance plans under the ACA are required to spend at least 80 percent of patient premiums on medical care.

Given the harmful effect these plans are having on families’ nationwide and broad agreement on their serious shortcomings we would like to gain a better understanding of how these plans are marketed and used in Virginia. To that end we would like to know:

  1. How many Virginia residents are currently enrolled in short-term limited-duration insurance plans?
  2. Has the Commission received complaints from Virginia residents regarding the marketing practices of such plans? If so, summarize the substance of the complaints and the number of complaints the Commission has received.
  3. How is the Commission working to ensure that individuals obtain quality, comprehensive coverage during the upcoming open enrollment period?
  4. Has the Commission taken any enforcement actions against companies that have mislead consumers as to what their plans will cover?
  5. How is the Commission collaborating with other states to limit the proliferation of junk plans and ensure that individuals have access to both the necessary information and comprehensive coverage they need?

Thank you for your consideration of this letter. We look forward to your responses to these questions and to working with you on this important issue.

 

Sincerely,

 

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