Obamacare signup screen Insuranceregulators say that tracking the marketing and sales ofshort-term plans is challenging, as is educating consumers aboutthe risks of limited coverage.

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Consumers shopping for insurance online last fall — using searchterms such as “Obamacare plans,” “ACA enroll” and “cheap healthinsurance” — were most often directed to websites that promoteindividual health plans that didn't meet consumer protections of the Affordable CareAct, according to a new study.

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They also failed to get adequate information about thoseplans' limitations, according to the analysisby researchers at Georgetown University's Center on HealthInsurance Reforms.

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Related: Fewer people enrolling in Obamacare as alternativeshave increased

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The study, provided to Kaiser Health News ahead of itspublication online, probed online marketing practices in eightstates.

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“It was disturbing, but not unexpected, to find such a highproportion of misleading ads and come-ons,” said Sabrina Corlette,the lead author. “That raises the risk that consumers could beduped into buying health insurance that they think offerscomprehensive and secure coverage, but does not.”

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The study focused primarily on the marketing of short-termplans, which don't have to meet most ACA provisions, such as therequirement to cover preexisting conditions. The researchers foundthat regardless of the search term used, companies promoting orselling only these kinds of plans dominated the results.

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Insurance regulators from each of the states told Corlette'steam that tracking the marketing and sales of short-term plans ischallenging, as is educating consumers about the risks of limitedcoverage.

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Michael Conway, Colorado's interim insurance commissioner, toldKaiser Health News in an interview that he has a “high level ofconcern” that the marketing tactics the study found could havedrawn unsuspecting consumers into selections that do not meet theirneeds.

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“We are on alert for complaints,” Conway said. “If we have tostrengthen our regulations on marketing, we will.”

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Eric Cioppa, Maine's insurance superintendent, said in aninterview that his office has no evidence that consumersunknowingly purchased short-term plans based on misleading onlinemarketing.

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“We'll respond accordingly and aggressively if we find that tookplace,” Cioppa said.

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But Corlette said the findings provide early evidence that afterregulatory changes by the Trump administration, some insurersare aggressively marketing short-term plans as a replacement fortraditional health insurance, without fully informing consumers ofthe limits of the skimpier coverage.

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That could warrant stronger federal and state oversight, shesaid.

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The study, funded by the Robert Wood Johnson Foundation, lookedat online marketing in Colorado, Florida, Idaho, Maine, Minnesota,Missouri, Texas and Virginia. Those states were selected to reflectdiverse geography and regulatory approaches, according to theresearchers. Of the eight, Colorado and Minnesota requireshort-term plans to adhere to a shorter contract duration thanrequired by federal law.

Changes in short-term plan rules

The ACA bars insurers from denying coverage to people who havehealth problems or charging them higher premiums. The law alsomandates a minimum set of health benefits and requires plans to capenrollees' out-of-pocket expenses.

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By comparison, short-term plans can deny coverage to applicantswho have a preexisting condition and often exclude or limitcoverage of maternity care, mental health treatment andprescription drugs.

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As a result, short-term plans cost significantly less —typically about half to a third of an ACA plan if the deductible isthe same. They are sold outside the ACA exchanges. And people whobuy them don't qualify for the government's premium subsidies.

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These plans are not new. They predate the ACA and allow peopleto buy coverage between jobs, for example.

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The Obama administration put a 90-day limit on such coverage in2017 because of concerns that the less expensive plans wouldattract younger and healthier people. Losing such customers couldundermine the stability of the ACA marketplaces because they wouldbe left with older and sicker enrollees.

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Beginning this year, however, the Trump administrationlengthened the potential duration of short-term plans to 364 daysand allowed customers to renew the plans.

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Seema Verma, the administrator of the Centers for Medicare &Medicaid Services that oversees the ACA insurance exchanges, saidthose changes offer more affordable coverage that can be “alifeline to people priced out of the ACA market.”

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“These plans are different, and consumers do need to know whatthey are purchasing, which is why we now require more robustwarnings about the limits of these plans than before,” she said.“Fundamentally, we believe in giving consumers more options andleaving it up to them to decide what is right for them and theirfamilies.”

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The study evaluated online ads in the weeks just before andduring the latest open enrollment for ACA coverage, which in moststates began Nov. 1 and ended Dec. 15. The researchers analyzed 256search results and 65 websites and interviewed state regulators inall eight states.

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They found that Google searches were most often topped by paid“lead-generating” websites. Such sites don't sell insurance but askshoppers for contact and demographic information. Insurers andbrokers can buy that information and contact prospective customers.Or, call centers affiliated with the lead-generating sites phoneconsumers and direct them to a seller.

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The researchers also created a profile of a 29-year-old consumerseeking insurance who was in good health and with an income of$20,000 so she was eligible for premium subsidies for ACA-compliantcoverage. They entered this consumer's information into severallead-generating websites and fielded six phone pitches from brokersselling short-term and other non-ACA plans.

Among their findings:

  • During ACA open enrollment, only 19 percent of the searchesusing the common search terms yielded sites offering solelyACA-compliant plans. Before open enrollment, the return was lessthan 1 percent.
  • Lead-generating sites promoting short-term plans or othernon-ACA compliant insurance products were the most common searchresult in every state, representing more than half of all searchresults before and during open enrollment.
  • The six brokers who encouraged the purchase of coverage overthe phone provided minimal plan information. Most refused toprovide written materials or discontinued the call when asked forsuch materials.
  • State officials lack full information about which insurers aremarketing short-term plans to their residents, with one officialcalling it “one of our biggest blind spots.” Most said they plan tostart monitoring the insurers' practices more closely thisyear.

'Necessary niche'

An estimated 600,000 to 750,000 people bought short-term plansin 2017. The Trump administration projected last year that about200,000 ACA customers would switch to this coverage in 2019 due toits rule change. A second government forecast predicted that thenew policy would boost short-term coverage enrollment to about2 million people by 2022.

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Insurers who specialize in short-term plans vigorously defendthem.

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“This is a small and necessary niche in the [individualinsurance] marketplace,” said Jeff Smedsrud, CEO of Pivot Health,based in Scottsdale, Ariz., and one of the firms whose website thestudy analyzed. “If people need temporary coverage, we are therefor them. We don't want people who qualify for a government subsidyto buy our short-term plans. They should get coverage under theACA.”

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Shaun Greene, head of business operations atAgileHealthInsurance.com, said short-term plans offer a moreaffordable option to people who don't qualify for a governmentsubsidy under the ACA.

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But Matthew Fiedler, a health insurance specialist at theBrookings Institution who was not affiliated with the study, saidthe longer-duration short-term plans may befuddle some customers.The study, he said, “strongly suggests that some consumers aregoing to be confused and end up with plans that cover less thanthey expected.”

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Kaiser Health News isa nonprofit news service covering health issues. It is aneditorially independent program of the Kaiser Family Foundation,which is not affiliated with Kaiser Permanente.

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