House Ways and Means Committee Focuses on Misleading Marketing Tactics From Junk Insurance Plans

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“Junk health plans” are health insurance policies known Association Health Plans and short-term plans. Typically, these junk plans contain fewer treatment and services than consumers anticipate, and short-term plans are exempt from the definition of individual health insurance coverage under the Patient Protection and Affordable Care Act (ACA). As such, these “junk plans” may discriminate against people with pre-existing conditions and are not required to cover benefits such as maternity services, prescription medications, and mental health services, among others.

A recent study by the Government Accountability Office found that nearly 25 percent of insurance agents provide potentially misleading information to consumers, leading to the purchase of substandard “junk plans” that lack all the protections available in the Affordable Care Act (ACA). These deceptive and misleading marketing tactics can persuade vulnerable consumers to purchase short-term plans and fixed indemnity products, and to join health sharing ministries that not only do not provide the minimum essential coverage guaranteed by the ACA but are also not eligible for premium tax subsidies.

In response to this report, House Ways and Means Committee Chairman Richard Neal sent  a letter to the Federal Trade Commission (FTC) requesting it brief the House Ways and Means Committee regarding the agency’s authority over these health insurance telemarketers. Currently, the FTC is bound by the McCarran Ferguson Act which limits its oversight over insurance, except when certain criteria are met. Senators. Bob Casey, Debbie Stabenow, and Tammy Baldwin have also introduced the Junk Plan Accountability Act which would ban false or misleading marketing of health insurance and explicitly provide the FTC enforcement authority over these telemarketers. To learn more about the Ways and Means Committee’s efforts to target misleading marketing of health insurance plans, read the Committee’s press release. 

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