Democrats on a U.S. House committee are investigating Minnetonka-based UnitedHealth Group and other companies that sell short-term health insurance policies, with leaders on the House Energy and Commerce Committee calling the coverage "junk" due to its limited benefits and lack of consumer protections.
Committee chairman Rep. Frank Pallone Jr., D-N.J., and Democrats who lead two subcommittees sent letters Wednesday seeking documents and information from UnitedHealth Group, Indiana-based Anthem and 10 other health care plans and insurance broker companies about the short-term health plan business, which the Trump administration has pushed as an alternative to coverage that complies with rules in the federal Affordable Care Act (ACA).
The lawmakers cited stories of consumers in short-term plans who have been denied coverage entirely, charged more based on age or gender or faced exclusions due to rules on pre-existing health care conditions. One cancer patient was stuck with $800,000 in medical bills, the lawmakers wrote.
"The committee's initial examination of these plans has yielded disturbing information about how insurance companies that sell [short-term coverage] discriminate against individuals with pre-existing conditions and put consumers at significant financial risk," Democrats on the committee said in a news release.
A UnitedHealth Group spokesman did not immediately comment. The company runs UnitedHealthcare, which is the nation's largest health insurer. Anthem is the nation's second-largest health insurer, selling coverage under Blue Cross and Blue Shield brands in several states.
Short-term policies have been sold for many years as a way for consumers to handle gaps in coverage, such as periods of up to three months when workers transition to coverage with new employers.
Last year, the Trump administration finalized a rule that would let insurers sell the coverage as a full-year alternative to plans for individuals that comply with ACA rules. The health law mandates that health plans cover essential health benefits and prohibits carriers from denying coverage to people with pre-existing health conditions.
In Minnesota, state law says short-term policies can provide coverage for a period up to 185 days in most cases, which limits their use as an alternative to ACA-compliant plans. A spokesman for the state Commerce Department told the Star Tribune in October that no carriers in the state had been approved to sell the new longer-duration short-term plans allowed by the Trump administration rule.
In other states, the administration's rule has allowed for new options in the individual market. In marketing materials reviewed by the Star Tribune in January, UnitedHealthcare said it had begun marketing in eight states short-term policies with coverage terms up to 360 days.
"Short term limited duration plans are a small part of [UnitedHealthcare's] overall commercial portfolio for group and individual medical and ancillary insurance products," a company spokeswoman said at the time in a statement. "Given these plans include pre-existing condition exclusions and other design features not in ACA plans, our broker education and marketing materials are written transparently to help ensure consumers understand the product they are buying."
The lawmakers Wednesday sent a letter to UnitedHealth Group Chief Executive David Wichmann that told the story of a man with back pain in Chicago who enrolled in a short-term policy through a broker. The man disclosed the back pain and said he wanted a policy that provided comprehensive coverage, according to the letter.
The broker assured the man that any medical treatment would be covered under the short-term health plan, the lawmakers wrote, but the man soon found himself with a cancer diagnosis and $800,000 in medical bills. The letter didn't say which insurance company provided the short-term coverage.
"The insurer deemed [the man's] cancer diagnosis a pre-existing condition, even though [he] was diagnosed with cancer after he enrolled," the lawmakers wrote. "It seems as though the broker misled [him] about the benefits covered."
In their letter, lawmakers asked insurers and brokers what share of applicants are denied coverage, and sought details about how short-term plans are marketed. They also asked for information on commissions paid to brokers and any complaints from consumers or regulators about deceptive advertising.