NEW: Government Watchdog Report Finds Health Insurance Alternatives May Leave Consumers and Workers Vulnerable to Low-Quality Coverage, Misleading Marketing
WASHINGTON – Today, Education and the Workforce Committee Ranking Member Robert C. “Bobby” Scott (VA-03) and Health, Employment, Labor, and Pensions Subcommittee Ranking Member Mark DeSaulnier (CA-10) announced the release of a new report from the Government Accountability Office (GAO) on health care arrangements—including Farm Bureau health plans, health care sharing ministries, and fixed indemnity plans—that are offered as alternatives to health insurance. The report found that these plans and memberships often do not provide individuals with the basic consumer protections provided by the Affordable Care Act (ACA) and may expose consumers and workers to misleading marketing.
“Today’s new report offers compelling evidence that alternatives to comprehensive health insurance—nontraditional arrangements that are not subject to federal and state standards—leave consumers and workers without the protections and quality coverage they deserve. While we still need additional information regarding enrollment in Farm Bureau health plans, health care sharing ministries, and fixed indemnity plans, it is clear that stronger oversight by state and federal regulators is necessary to protect individuals from inadequate coverage and misleading marketing practices,” said Ranking Member Scott. “Every American deserves access to affordable and high-quality health coverage, and I will continue working with Ranking Member DeSaulnier and my colleagues on the Committee to deliver on that promise.”
“With the passage of the Affordable Care Act, we took historic steps toward ensuring comprehensive health insurance coverage for all Americans. GAO’s report gives us further evidence that alternatives to health insurance need to be better regulated to more fully support and protect consumers,” said Ranking Member DeSaulnier. “I was pleased to work with Ranking Member Scott to request this report, which found that these alternatives often have fewer consumer protections and are sometimes marketed misleadingly to consumers, and we are committed to using these findings to improve Americans’ access to robust health insurance coverage.”
Under the ACA, individual and small group health plans must adhere to certain consumer protections, including the requirement to cover essential health benefits and prohibition on denying coverage because of pre-existing conditions. However, alternatives to health insurance are generally not subject to these requirements. As a result, according to the GAO report, alternatives to health insurance are often compliant with only a few—or even none—of the consumer protections found in plans that are subject to the ACA. For example, GAO found that many of these arrangements do not cover routine examinations, preventative screenings, prescription drugs, and other basic services.
The report also documents federal and state regulators’ concerns that alternatives to health insurance utilize misleading marketing practices, particularly on online platforms, that may cause consumers to falsely believe they are enrolling in ACA-compliant health insurance. Moreover, the GAO found that health insurance sales representatives may have financial incentives to sell alternatives to health insurance instead of an ACA-backed plan if they receive higher commissions for doing so.
Read the full GAO report here.
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