During Healthcare Enrollment Period, King Seeking Improved Consumer Protections Surrounding 'Junk Plans'

WASHINGTON, Nov. 22 -- Sen. Angus S. King Jr., I-Maine, issued the following news release:

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- Senator joins colleagues seeking action on links on the HealthCare.gov website that re-direct customers to third-party online brokers that sell junk plans on their websites.

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U.S. Senator Angus King (I-Maine) joined a group of 23 Senators in sending a letter to the Centers for Medicare and Medicaid Services (CMS) and the Inspector General for the Department of Health and Human Services (HHS), requesting they address their apparent efforts to promote "junk plans", insurance plans that lack protections for people with pre-existing conditions and would increase costs for millions of Americans. In their letter, the Senators draw attention to the fact that the HealthCare.gov website is now directing consumers during the ongoing Affordable Care Act (ACA) Open Enrollment period to junk plans through third-party brokers, with little to no information about the lack of coverage provided by these so-called "short-term" plans.

"We are extremely concerned that the increased availability of junk plans and lack of oversight by CMS will cause consumers who believe they are purchasing ACA-compliant health plans to inadvertently sign-up for junk plan coverage that is less comprehensive and could expose them to higher out-of-pocket costs," wrote the Senators. "Americans who purchase these junk plans risk being denied coverage for pre-existing conditions and left vulnerable to unexpected gaps in coverage and massive medical bills in the case of health care emergencies.

"Short-term, limited-duration insurance plans were never intended to be an alternative to comprehensive health coverage and pose dangerous risks for consumers. In 2018, the Trump Administration expanded the maximum coverage duration for junk plans from 90 days to 364 days, allowing for these plans to be easily confused with year-round comprehensive coverage that meets the ACA's standards. The Trump Administration has also encouraged states to apply for waivers from the ACA that would allow for the ACA's premium tax credits to be used to subsidize junk plan coverage."

Senator King is a vocal proponent of efforts to protect and improve the Affordable Care Act, which has helped millions of Americans access healthcare, including cosponsoring and voting for legislation seeking to overturn the Administration's rule allowing for the expansion of junk plans. On November 1st, the beginning of the ACA's Open Enrollment period, Senator King joined Maine healthcare providers and advocates at the Greater Portland Health Clinic to urge Maine people to sign up for healthcare. In May, he announced his support for a Senate resolution rejecting the Department of Justice's (DOJ) decision to uphold a Texas Federal Judge's ruling that deems the Affordable Care Act unconstitutional. In July 2018, Senator King joined a group of his colleagues to introduce a resolution that would have authorized the Senate Legal Counsel to intervene in Texas v. United States, and in December 2018 he joined a group of Senate colleagues to call on President Trump to condemn the resulting decision in the case. He has also fought the Administration's various attempts to sabotage the health care law and met with Maine people around the state to discuss the ACA's importance to their lives.

The full letter the letter can read below or downloaded HERE: https://www.shaheen.senate.gov/imo/media/doc/2019-11-20-Letter%20to%20HHS%20OIG%20and%20CCIIO%20on%20Junk%20Plans%20and%20Brokers.pdf

The Honorable Randy Pate, Deputy Administrator and Director, Center for Consumer Information and Insurance Oversight, Centers for Medicare and Medicaid Services, U.S. Department of Health & Human Services, 200 Independence Ave SW, Washington, DC 20201

The Honorable Joanne Chiedi, Acting Inspector General, U.S. Department of Health and Human Services, 330 Independence Ave SW, Washington, DC 20201

Dear Director Pate and Acting Inspector General Chiedi:

As the Open Enrollment period for health insurance coverage for 2020 continues, we write to express concern regarding the increased promotion of short-term, limited-duration insurance plans, also known as "junk plans," to consumers seeking coverage on the federal Health Insurance Marketplaces. We are concerned that the Centers for Medicare and Medicaid Services (CMS) is not only failing to conduct sufficient oversight to protect customers, but is actively emailing consumers to encourage them to obtain coverage through third-party agents and brokers instead of the HealthCare.gov website. These brokers often have significant incentives to enroll consumers in junk plans instead of comprehensive coverage that meets the Affordable Care Act's (ACA's) coverage and pre-existing condition protection standards.

We are extremely concerned that the increased availability of junk plans and lack of oversight by CMS will cause consumers who believe they are purchasing ACA-compliant health plans to inadvertently sign-up for junk plan coverage that is less comprehensive and could expose them to higher out-of-pocket costs. Americans who purchase these junk plans risk being denied coverage for pre-existing conditions and left vulnerable to unexpected gaps in coverage and massive medical bills in the case of health care emergencies.

Short-term, limited-duration insurance plans were never intended to be an alternative to comprehensive health coverage and pose dangerous risks for consumers. In 2018, the Trump Administration expanded the maximum coverage duration for junk plans from 90 days to 364 days, allowing for these plans to be easily confused with year-round comprehensive coverage that meets the ACA's standards. The Trump Administration has also encouraged states to apply for waivers from the ACA that would allow for the ACA's premium tax credits to be used to subsidize junk plan coverage.

Insurance brokers are now aggressively marketing junk plans to consumers--including consumers who come to the HealthCare.gov portal seeking comprehensive coverage and then click on links that re-direct them to web brokers and phone-based broker services.

Commissions that these brokers receive for enrolling a customer in a junk plan are often up to four times as high as the commissions that brokers would receive for enrolling the individual in an ACA-compliant plan. This creates inherent incentives for brokers to push customers to purchase a junk plan, even when tax credits may be available to help defray the cost of an ACA-compliant Marketplace plan. According to data from CMS, nearly 90 percent of Americans shopping for coverage on HealthCare.gov qualify for these tax credits.[1] These online broker sites also fail to sufficiently connect Medicaid-eligible consumers to their state Medicaid agency and can even continue to press a consumer to purchase junk plan coverage after informing the consumer of Medicaid eligibility.

Consumers should be able to trust that when using a government-operated platform such as HealthCare.gov, they will not be subject to aggressive or misleading marketing techniques by third-parties that are incentivized to steer individuals to a substandard product. Not only has CMS failed to make consumers aware of the commission payment incentives that exist for brokers to enroll customers in junk plans, but it is also uncertain whether the agency has procedures in place to track what happens to customers who are re-directed to third-party broker sites.

It is also unclear what statutory authority CMS relies upon to authorize the re-direction of HealthCare.gov customers toward third-party broker entities that sell ACA-compliant coverage and junk plan coverage on the same platforms. Section 1311(d)(2)(B)(i) of the ACA prohibits an Exchange from taking action to "make available any health plan that is not a qualified health plan" and does not meet the ACA's coverage standards. By allowing HealthCare.gov customers to be re-directed to third-party brokers that can sell the customer a junk plan during the same interaction, the federal Exchange would appear to be "making available" health plans that are not qualified health plans under the ACA. By using either CMS program management funds or federal Health Insurance Marketplace user fees to support HealthCare.gov functionality that steers customers to brokers that can sell junk plans, CMS could also be violating the federal rules that govern the use of program management funds and user fee dollars.[2]

Furthermore, on November 6th and again on November 13th, HealthCare.gov sent an e-mail (see Exhibit 1) to consumers encouraging them to circumvent HealthCare.gov completely and directing them to HelpOnDemand.com, a third-party operated site for connecting agents and brokers with potential customers. We have serious concerns regarding the lack of oversight that CMS has over third-party agents and brokers and the usage of government resources to promote third-party platforms that may encourage junk plan enrollment from HealthCare.gov customers.

We ask that you please provide us with a written response to the following questions by no later than December 4, 2019:

1. Please explain the statutory authority that CMS relies upon to direct HealthCare.gov customers to third-party insurance brokers who sell both ACA-compliant qualified health plans and junk plans on the same platform.

2. Please detail the resources that CMS has expended to direct HealthCare.gov customers to third-party insurance brokers who sell both ACA-compliant qualified health plans and junk plans on the same platform, and detail the authority that allows CMS to expend resources in that way.

3. Please provide an accounting of the Department of Health and Human Services (HHS) and CMS budget for advertising or promoting Open Enrollment.

4. Please provide the total number of consumers who received the November 6, 2019 and November 13, 2019 e-mails sent by HHS promoting the use of HealthOnDemand.com (see Exhibit 1). Please provide an estimate of the number of recipients who accessed HelpOnDemand.com through the November 6th and November 13th e-mails.

5. Please detail the policies and procedures implemented by CMS to ensure that agents and brokers comply with the guidelines established in the CMS-approved vendor training that they are required to complete in order to sell insurance through HealthCare.gov. How does CMS ensure that agents or brokers using third-party sites such as HelpOnDemand.com remain in compliance with the HealthCare.gov vendor training?

6. Please describe what controls CMS has implemented to ensure that consumers who qualify for cost-sharing subsidies or are eligible for enrollment in Medicaid or Medicare are properly informed of their eligibility if they are directed away from HealthCare.gov and attempt to enroll in coverage through third-party sites such as HelpOnDemand.com.

We are calling on HHS and CMS to take action to limit the availability of junk plans and take steps to ensure that consumers using HealthCare.gov are being offered comprehensive health insurance, receiving premium tax credits, and being enrolled in Medicaid, if eligible. Furthermore, CMS should take action to hold insurance brokers accountable when they mislead HealthCare.gov customers and misrepresent junk plans as safe alternatives to ACA-complaint health insurance coverage. During this year's Open Enrollment period, it is essential that you act fast in order to protect consumers.

[1] Centers for Medicare and Medicaid Services, "Plan Year 2020 Qualified Health Plan Choice and Premiums in HealthCare.gov States," October 22, 2019

[2] See Affordable Care Act section 1311(b); See also Anti-Deficiency Act (Pub. L. 97-258) and OMB User Fee Circular (Circular No. A-25 Revised).