Campaign Action
Thanks to Donald Trump, a lot more Americans will get to explore the question of whether cheap health coverage is really cheap if it doesn’t pay your medical bills. Trump’s recent healthcare executive order includes a push toward association health plans, which in theory allow small businesses to band together to provide cheaper insurance, but in practice have allowed fraud and mismanagement.
Robert Loiseau, who represented fraud victims in Texas, recalled their shock when they tried to receive care. “People bought insurance coverage because it was cheap and seemed to provide them with coverage they needed,” he said. “It had a veneer of legitimacy. But when they went to the doctor, they found out all of a sudden that their insurance company, their perceived insurance company, was in receivership and that they had no coverage.”
The Labor Department filed suit last year against a Florida woman and her company to recover $1.2 million that it said had been improperly diverted from a health plan serving dozens of employers. The defendants concealed the plan’s financial problems from plan participants and left more than $3.6 million in unpaid claims, the department said in court papers.
In another case, a federal appeals court found that a health plan for small businesses in New Jersey was “aggressively marketed but inadequately funded.” The plan collapsed with more than $7 million in unpaid claims.
Other cases have featured straight-up embezzlement leading to unpaid claims.
The push for association health plans is also another Republican end run against the requirement that insurance plans cover essential health benefits like maternity care, prescription drug benefits, mental health coverage, and more. But hey! It’ll sure look cheap up until people get stranded with giant medical bills they have to pay themselves after having paid for their cheap insurance.