Without Obamacare Mandate, ‘You Open the Floodgates’ for Skimpy Health Plans

While repeal supporters argue that people would benefit by having the choice to buy less expensive plans, state regulators have been cracking down on rogue agents who have misled customers about what such inexpensive plans cover or more important don’t.


Millions Pay the Obamacare Penalty Instead of Buying Insurance. Who Are They?

The Senate Republican tax bill includes the repeal of the Affordable Care Act’s individual mandate, the requirement that all Americans purchase qualifying health insurance or pay a penalty.

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Examples abound of people who are dumped from such policies or denied coverage, mired in debt and medical bills totaling thousands, if not hundreds of thousands of dollars.

One case pending in federal court involves Kevin Conroy, who had a heart attack in 2014 and underwent triple bypass surgery, just two months after his wife, Linda, obtained a short-term policy over the telephone.

Their insurer, HHC Life, refused to pay the bills.

“We freaked out,” Ms. Conroy said. “What were we going to do? It was $900,000.”

The insurer informed the Conroys the policy was “rescinded,” to use the industry jargon. After poring through his medical records, HCC claimed Mr. Conroy failed to disclose he suffered from alcoholism and degenerative disc disease, conditions he said were never diagnosed. “When one thing didn’t work, they went to another,” Mr. Conroy said.

HCC Life, a unit of Tokio Marine HCC, says it will defend its case. The company is also the subject of a multistate review by insurance regulators to see if it engaged in unfair or deceptive acts. It says it has fully cooperated. HCC Life stopped selling short-term policies last May.

A major player in this area is UnitedHealth Group, which abandoned the Affordable Care Act market after incurring sizable losses. United offers short-term plans through its Golden Rule unit. Before the federal law, Golden Rule was among those insurers criticized for rescinding policies. The company recently told investors it was excited by the president’s executive order because that would mean an increase in business for these plans.

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