“TrumpCare” is a term used by a number of unscrupulous marketers who are selling short-term or fixed indemnity plans that offer little to no coverage for serious illness or injury. In fact, some of the discounted healthcare plans being sold should be called “TrumpDon’tCare”, because they are nothing like traditional or Obamacare policies. Before you agree to any of these schemes, you must understand that you aren’t buying medical insurance as much as a low-value form of term insurance. And if you are one of those who no longer have access to Obamacare, please know that you aren’t alone. According to recent Gallup Polls, the number of uninsured American’s have risen under the Trump Administration. Today, an estimated 7 million people who were formerly covered by health insurance in 2016 were going without by 2018.
The major problem with these Trumpcare Short-term plans is that they are offering much less than what you need, but at the same time are highly profitable for insurers and offer hefty sales commissions for brokers. So insurers have an economic incentive to peddle these bogus plans. Consumers are attracted to the short-term TrumpCare plans because they are less expensive than ObamaCare Exchange. What they don’t know is that the plans are cheaper largely because they set annual or lifetime payment limits that are wholly inadequate. Most of these plans exclude people with pre-existing medical conditions, don’t cover prescription drugs and exclude in fine print some conditions or treatments. Injuries sustained in school sports, for example, often are not covered. So they are a very high-risk proposition for consumers….and unusually high-profit for the insurers and brokers. And that’s a very bad combination. As consumers begin shopping for health insurance in the coming months, they need to be wary of any TrumpCare policies. Here’s why.
What TrumpCare Plans Are and Aren’t Offering
Since its failure to replace Obamacare, the Trump administration has been gradually reshaping the healthcare system using executive orders, legislative action, action in congress, and changes done via federal agencies like HHS. Some of the executive actions taken by the Trump Administration include:
- provide a less expensive alternative to Obamacare by allowing workers and small businesses to pool together to buy insurance, or expand access to association health plans.
- allow short-term health plans that last one year with an option to last up to three years. This contrasts with Obamacare, which limited such plans to a term of three months.
- eliminate outreach advertising for the Obamacare health exchanges
- refuse to issue required payments for insurers who accept disproportionately sick customers, and
- lure healthy customers out of the exchanges, so as to drive up costs for those who remain.
But there are big problems with Trump’s recent executive orders:
- The five big healthcare companies with the clout to operate across state lines have raised prices and offered lesser coverage. That’s because they are no longer regulated and they are exempted from the Affordable Care Act’s rules and state licenses.
- As heathy people who are willing to risk economic ruin flee to the lower-cost, lower-quality association plans, the remaining Obamacare plans get stuck with the sickest people. This forced yet more insurance companies to raise rates or drop out of the exchanges. For example, May 2018, Maryland health insurers asked for an average 30 percent increase in premiums for that very reason. The consulting firm Avalere Health sounded the alarm that siphoning off of customers from the Obamacare exchanges will lead to premium increases for people left behind of about 3.5 percent, causing 130,000 more people to become uninsured over the course of five years. It estimates that 3.2 million people eventually will enroll in the plans, some of whom were getting Obamacare before, others of whom were uninsured.
- Researchers at the Center on Health Insurance Reforms at Georgetown University have warned that the plans offer low “teaser” rates when they first roll out but then, when it is time for people to renew their coverage, might hike prices based on how sick an enrollee is and could charge older adults more.
Real Life Examples of How Consumers Got Screwed by TrumpCare Plans
An Arizona couple bought a TrumpCare plan from Health Insurance Innovations Inc., with the understanding that it would be comprehensive. They didn’t notice that it was a “Short-Term Medical Insurance.” As Bloomberg chronicled, their TrumpCare plan was nothing like the ones consumers expect under the 2010 Affordable Care Act. The Trump administration decision to expand the definition of “short-term” from three months to a year, with the option of renewing for as long as three years, allowed them to be sold a plan with very little coverage. One of the family members had a heart attack and had to be hospitalized. Despite having what they thought was health insurance, the family got charged $244,447.91 by their insurer.
Not until after having incurred a bankruptcy-causing debt did the family learn that the plan they had purchased didn’t cover preexisting conditions, limited the number of doctor visits, and capped hospital coverage at $1,000 a day. It allowed a maximum of $250 per emergency room visit and $5,000 per surgery, not nearly enough to cover the usual cost of those services. On top of all of this, they were on the hook for a $7,500 deductible before any coverage was offered. And the listed maximum total payout of $750,000 was misleading: It didn’t mean their bills would be covered up to that amount. It just meant they could make as many claims as they needed but the total of payouts couldn’t exceed $750,000, in the aggregate. Of course, the family would have had to make about 150 claims a year to reach that limit.
Their insurance disaster story isn’t all that uncommon, sadly enough. Complaints to the Federal Trade Commission obtained by Businessweek via the Freedom of Information Act detail numerous cases of HIIQ customers buying medical insurance they believed was comprehensive, then having their claims rejected or barely paid out. Bloomberg reports that a 65-year-old woman in Great Falls, Mont., who bought one of these TrumpCare plans in 2016 thought she had comprehensive coverage. But after her husband’s emergency gallbladder surgery, she got a bill for $60,000. The insurer paid only $100.
The new Trumpcare plans being peddled may be somewhat cheaper for consumers who are healthy enough to qualify. But don’t be fooled — they don’t cover much. If you experience any unexpected medical problems or have to take uncommon prescription drugs, Northwest University found that you’re screwed. Meanwhile, unscrupulous insurance brokers and insurers are making big bucks off of these inferior plans that don’t really even deserve to be called health insurance.