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Beware of Skimpy Health Insurance Plans

Search online at to avoid dubious marketing

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Shopping for health insurance under the Affordable Care Act?

Type "," the federal government’s website, into your browser.

That advice is from university researchers who said consumers searching online could unwittingly be steered to alternative plans that do not comply with key provisions of the ACA. These consumers could be “vulnerable to catastrophic medical bills,” they warn.

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Be careful of search terms 

The Georgetown University researchers found that consumers who searched online using phrases like “cheap health insurance” or “ACA enroll” — and visited websites that turned up high in search results — could be led astray by the deceptive marketing of alternative plans.

Alternative plans lack ACA protections, the researchers said. Such policies fail to protect people with preexisting conditions and exclude many essential health benefits, they noted.

Despite such limitations, enrollment in these products has increased in recent years in part because of dubious marketing aimed at people looking for comprehensive major medical coverage, they said.

The university’s Center on Health Insurance Reforms produced the report, which said its findings were in line with past analyses.

High-pressure tactics

“These analyses all reached similar conclusions — sales representatives often misrepresent the coverage to consumers, urge them to purchase plans over the phone without written information, or fail to disclose major coverage limitations,” including limits for COVID-19 services, the new report said.

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The latest findings are based on the experiences of secret shoppers, people who pose as consumers. Insurance sales reps were contacted after firms with which they are affiliated turned up high in search results.  

The reps were given profiles of two people, each said to live alone with annual incomes of $20,000. (The prospective buyers were said to have lost employer coverage and supposedly were planning a move to Texas.)

  • One prospective buyer was “Dani,” described as a 28-year-old with no preexisting medical conditions.
  • The other was “Jen,” listed as a 48-year-old with an unspecified heart condition who takes a generic drug for high cholesterol.
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Telephone calls with 20 sales reps took place, but in only five cases were the secret shoppers referred to ACA-compliant plans. 

In fact, both secret shoppers would have been eligible for ACA-compliant insurance without paying any premiums or for $2 a month in premiums. Yet in most cases the shoppers were offered plans with monthly premiums of $70 to $300.

Additionally, the reps did not disclose accurate information about the affordability of marketplace plans, the report said, and one rep remarked that marketplace plans “are just going to end up costing you more money.”

The report also said ACA coverage now is broadly available — and more affordable — because of enhanced premium subsidies enacted in the American Rescue Plan, signed into law in March. During a COVID-19 special enrollment period Feb. 15-Sept. 15, millions of people were eligible for plans with zero premiums; during the current open enrollment period, they may qualify for small premiums or none whatsoever.

Since the secret shoppers compared plans during the now-concluded special enrollment period, researchers believe some consumers now seeking coverage likewise will confront dubious marketing.

The report is called “Misleading Marketing of Non-ACA Health Plans Continued During COVID-19 Special Enrollment Period.”

Katherine Skiba covers scams and fraud for AARP. Previously she was a reporter with the Chicago Tribune, U.S. News & World Report and the Milwaukee Journal Sentinel. She was a recipient of Harvard University’s Nieman Fellowship and is the author of the book Sister in the Band of Brothers: Embedded With the 101st Airborne in Iraq

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