Casey, Stabenow: Undercover GAO Investigation Shows How Consumers were Misled Into Purchasing "Junk Plans"

Press Release

Following a request from U.S. Senators Bob Casey (D-PA) and Debbie Stabenow (D-MI) for the Government Accountability Office (GAO) to investigate "junk" health insurance plans being sold online, GAO found that junk plans were deceptively marketed to consumers as covering pre-existing conditions when the plans did not. The report details a "secret shopper" investigation, in which GAO made 31 undercover calls to insurance sales representatives, posing as consumers looking for health insurance that would cover their pre-existing conditions. There are an estimated 135 million Americans with a pre-existing condition.

"We are in the midst of an economic and public health crisis, yet President Trump has continued to undermine Americans' access to comprehensive health insurance, and has allowed substandard insurance plans to flourish. The report that Senator Stabenow and I requested reveals that, in almost one in every four of the calls made by undercover callers, they were sold junk plans that would not cover their pre-existing conditions," said Senator Casey. "Families are being deceptively sold junk plans and are seeing bills skyrocket, and coverage denied. With an estimated 5.5 million Pennsylvanians having pre-existing conditions, that is simply unacceptable. Now more than ever, Americans need comprehensive coverage, and they need insurance that covers pre-existing conditions."

"It is outrageous that in the midst of this once in a generation pandemic the Trump Administration is making it harder for Americans to get comprehensive health care. This investigation made it clear that President Trump is pushing junk health insurance plans on unsuspecting families who are trying to stay safe and healthy. These plans don't protect people with pre-existing conditions or cover basic services like prescriptions, hospital care and maternity care. While the Trump Administration is taking health care away from families, Democrats are fighting to stop the sale of these dangerous plans and ensure Americans have accurate information on enrolling in quality health care plans," said Senator Stabenow.

The Senators held a press call to release the findings of the report. Pennsylvania's Insurance Commissioner, Jessica Altman, joined the call along with a representative from the GAO. "These plans are clearly not a long-term alternative to comprehensive coverage. Consumers may very well experience an upfront savings in premiums, but the affordability of these skinny plans will likely prove false," said Commissioner Altman. "Those who need health care will run up against exclusions and limitations on coverage that, while making the purchase price more affordable, will do so only as a trade-off for reductions in benefit coverage and provider access. The complaints my Department has received have been devastating."

To address the issues uncovered in the report, Senators Casey and Stabenow are recommending steps to combat the deceptive practices of junk plans: allowing the FTC to crack down on deceptive, online advertising for junk plans, tightening consumer disclosure requirements for these plans and strengthening federal outreach efforts for ACA enrollment, so consumers know how to enroll in comprehensive coverage.

Senator Casey released a report in October 2019 about misleading online advertisements related to junk plans. Senator Casey and Senator Stabenow are cosponsors of the No Junk Plans Act, which would undo the Trump Administration's rule allowing enrollment in certain junk insurance plans for up to one year, with the option to re-enroll for up to three years.

Read the GAO report here.

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