It's the insurers not the Healthcare law

Unscrupulous insurers using Obamacare confusion to sell junk insurance

Democrats should not be panicking over the relatively tiny number of people losing their junk health insurance plans. They should be loudly and continuously beating up on the insurance companies using Obamacare to trick people into buying new ones. Case in point: USHealth Group.

The Affordable Care Act was designed to make sure all Americans had a certain level of insurance. But TPM has learned that USHealth Group is actively telling consumers that they don't need that minimum level. In fact, company representatives are telling people they'd be better off without it. And the company may be just one player in a larger industry trend, where companies see non-ACA compliant plans, like the so-called fixed benefit coverage marketed by USHealth Group, as a business opportunity.

Health care industry analysts have long derided the kinds of non-insurance health care coverage products the company is selling as "junk insurance."

"They were not intended to be health insurance," Sabrina Corlette, a research professor at the Health Policy Institute at Georgetown University, told TPM, speaking about fixed benefit plans. "They were intended to be what are called income replacement policies. ...

But over the years, these things have kind of morphed. And for many people, unfortunately, mainly because they come with a cheaper sticker price, they are marketed as and treated as health insurance. Even though the coverage is really crappy."

USHealth Group's pitch is three-fold, according to accounts provided to TPM by Mortimer and another prospective customer. First, it says, it is a misconception that everyone needs ACA-compliant insurance. Second, USHealth Group plans are cheaper than ACA-compliant policies, even after customers pay the tax penalty for failing to comply with the ACA's individual mandate. Third, Obamacare is scary.

What USHealth Group isn't telling would-be customers, what they are lying to them about, is that these fixed benefit coverage plans, in which the company reimburses customers a fixed amount of money for medical services, don't comply with the law.