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.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. These plans aren't outlawed by Obamacare, but they don't meet the requirements for coverage. That means that people buying them are just wasting their money, because they will also have to get real coverage and if they don't, they'll have to pay a penalty. They also won't have any coverage if they get sick. One of these kinds of plans, Karen Pollitz, a senior fellow at the Kaiser Family Foundation said, is "not health insurance, in the sense it's going to protect you in any way from going broke."
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.
Other, only slightly less dastardly, insurers are misleading their customers, canceling policies that otherwise would have been grandfathered in order to get people into new ones that they can charge more for, and not informing customers about their options on the exchanges. The president's administration fix would at least require insurers who do cancel plans to inform people of their options.
It's not too late for Democrats, including President Obama, to go on offense against the insurance companies that are making the roll-out of Obamacare that much more difficult. Obama has met Republicans partway with his "fix" for policy cancellations. Now's the time to say enough, and to start reminding people about what insurance companies do and why they made this law so necessary in the first place.