This open enrollment season, keep an eye out for health insurance that seems too good to be true

It was nearly a year before Kelly Macauley realized the health plan she bought while shopping for coverage in October 2021 wasn’t actually insurance. Sure, red flags popped up along the way, but when she called to complain, she said, she received explanations that sounded reasonable enough and made her pay her $700 monthly premiums.

She said she was told her medical bills would not be paid because the hospital filed them incorrectly. Jericho Share, the nonprofit that sent her a membership card that said “This isn’t insurance,” was only the insurer of her policy, not the actual insurer. That she hadn’t received a policy welcome pack because the company was saving paper and passing those savings on to customers.

Then, this summer, the 62-year-old retired teacher, who recently relocated to South Carolina from the Philadelphia area, learned that her plan had only paid $120 of the bill for her hip replacement last year, giving her a balance of more than left $40,000. She said she was assured the procedure was covered when she looked for insurance. But it turns out the plan she bought wasn’t insurance at all, but part of a so-called health care ministry.

Health care sharing ministries are an alternative to health insurance, where members agree to share medical costs. They’re often faith-based and can be cheaper than traditional insurance, though they don’t necessarily cover their members’ medical bills, according to a report by the Commonwealth Fund.

“It was never mentioned to me,” Macauley said. “I honestly believed I was getting legitimate health insurance.”

Through the state and federal insurance marketplaces, consumers can purchase health insurance plans that comply with the Affordable Care Act and find out if they are eligible for financial assistance. Open entries for Pennsylvania’s marketplace, Pennie, run through January 15th. New Jersey residents have until January 31 to purchase insurance through Get Covered NJ.

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» READ MORE: Open enrollment at ACA began on November 1st. Here’s what you should know.

However, experts warn that the rush to buy insurance coverage also presents an opportunity for people selling alternative products, such as Although these alternatives are legal themselves, experts warn that misleading marketing can lure consumers looking for comprehensive coverage into purchasing health plans that exclude protection for pre-existing conditions and leave patients vulnerable to high medical bills.

“It’s the best time to look for insurance-seeking consumers and set them on the wrong track,” said JoAnn Volk, co-director of Georgetown University’s Center on Health Insurance Reforms.

Volk has identified telltale signs of this wrong path: when the person selling you a plan starts asking you about your health history, refuses to send you information about the plan overall, or agrees to provide that information only after You have provided payment information. According to a classified 2021 buyer’s report on deceptive marketing practices that Volk co-authored, a broker incorrectly cited HIPAA, the patient privacy law, as a reason for not sharing information about the health plan.

“Just made up stuff,” Volk said. “When you commit fraud, there are no limits.”

In a statement to Kaiser Health News, Jericho Share spokesman Mark Hubbard said the organization cannot discuss Macauley’s case without her prior written consent, but does not tolerate misrepresentation or unethical behavior on the part of its programs.

Statewide, lawmakers and regulators are paying attention to how health plans are sold. Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, is investigating complaints about the marketing of Medicare Advantage plans. And in May, the Centers for Medicare & Medicaid Services found that complaints about marketing practices for Medicare Advantage and Medicare prescription drug benefit plans increased from 15,497 in 2020 to at least 39,617 in 2021.

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“Healthcare fraud has grown exponentially,” said Delaware’s Trinidad Navarro Insurance Commissioner, who also chairs the National Association of Insurance Commissioners’ Anti-Fraud Task Force.

Several factors are causing the surge, Navarro said. Rising healthcare prices can drive up the cost of regulated healthcare plans, such as those that comply with the Affordable Care Act. Higher costs are causing more Americans to look for cheaper alternatives that typically don’t offer as much coverage and can confuse consumers. These types of plans have proliferated under President Donald Trump’s administration, Navarro said.

“I don’t want to sound political,” said Navarro, an elected Democrat, “but the previous presidential administration really pushed the meager plans and the alternatives to the ACA, and I don’t necessarily think they understood the fraud that was associated with those plans.” .”

Finally, Navarro said, since states are the primary regulators of insurance, curbing healthcare fraud can be like playing a mole game — when one state takes action, scammers move to another to open a business.

To combat this tactic, Navarro says insurance regulators nationwide have set up what he calls a “confluence site” to share information about bad actors with each other. For consumers, Navarro said regulators are talking about creating a public search tool for complaints against health insurance brokers, similar to the BrokerCheck tool developed by the financial industry regulator to monitor stockbrokers.

For now, he suggests working with health navigators, who help consumers sign up for plans through the official health insurance marketplace, healthcare.gov. Also, regulators have taken legal action over misleading sales tactics. In August, the Federal Trade Commission won $100 million in refunds for consumers it said were “tricked” into bogus health plans. Last year, the Massachusetts Attorney General won $515,000 in consumer compensation claims from an insurance company accused of fraudulent sales practices.

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October court filings show that California’s attorney general is investigating Jericho Share — the Department of Health and Human Services that Kelly Macauley said she unknowingly purchased a plan — to determine if it meets state requirements for the Department of Health.

Jericho Share spokesman Hubbard said the organization was responding “appropriately” to the attorney general’s investigation.

Macauley contacted KHN after reading a June survey of consumers who said they would buy insurance, only to later learn they had been sold memberships with that Department of Health.

Hubbard noted that since the publication of this story, Jericho Share has automatically provided 72-hour refunds for new consumers who request a refund within 30 days of signup, no longer allows “outsourced marketing for signups,” and a member guide and popup added website stating that Jericho Share is a healthcare sharing service.

The company responded online to Macauley’s poor review on the Better Business Bureau’s website, asking for more information on her case. She said she provided that information but never heard a reply.

After Macauley tried unsuccessfully to cancel her Jericho stock plan directly with the company, she said she called her credit card company to prevent them from approving further charges from the company. When she described her situation, Macauley said the personable credit card rep told her, “This is scamming,” and offered to try to get Macauley all her rewards back.

Even if those efforts were successful, Macauley would be left with the tens of thousands of dollars in medical expenses she incurred when she was unknowingly uninsured.

She’s back in the health insurance market and planning to go with a company she’s heard of before.

“Whatever it costs,” Macauley said, “I just want to know that I really do have insurance.”

Kaiser Health News is a national newsroom dedicated to health issues.

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