According to a new report released by the U.S. Government Accountability Office (GAO), some health insurance sales representatives are engaging in deceptive practices when selling short-term limited duration health insurance plans. Such plans do not need to comply with the Patient Protection and Affordable Care Act (ACA) and are permitted to discriminate on the basis of preexisting condition.
GAO performed 31 undercover tests to select sales representatives and stated that they had pre-existing conditions, such as diabetes or heart disease. They requested coverage for these conditions to see if the sales representatives would direct them to an ACA-complaint plan. In 21 of the 31 tests, the representative appropriately referred the agent. In two of the tests, the sales representative did not appear to engage in deceptive marketing practices but were not always consistent or clear in their explanation of the type of coverage and plans they were selling. In the remaining eight tests, the sales representatives engaged in potentially deceptive marketing practices, such as claiming the pre-existing condition was covered when the health plan documents GAO received after purchase said otherwise. GAO plans to refer these eight cases of potential deceptive marketing practices to the Federal Trade Commission and corresponding state insurance commissioners’ offices for follow-up as appropriate. Read more here.