Opinion Editor’s Note: Editorials they represent the views of the Star Tribune Editorial Board, which operates independently of the newsroom.
Open enrollment is the window of time at the end of the year when consumers make a critical health care decision — which health insurance plan to buy for the coming year to cover themselves and the their families.
Those who have coverage for a job usually have a variety of plans to choose from. Those who buy for themselves – such as early retirees, farming families or entrepreneurs – have a dizzying choice. It’s that last group, currently right in the middle of open enrollment, that should take note of recent data from Colorado that underscores an old truth:
If something sounds too good to be true, it probably is.
The information from Colorado state regulators concerns a product known as “health sharing services” that can be marketed to consumers who purchase a health plan. In a Health Community Ministry (HCSM), “members follow a common set of religious or ethical beliefs and make monthly payments to help pay other members’ qualified medical expenses,” according to the Commonwealth Fund, a health policy organization. non partisan
Sounds like health insurance. And to someone on a budget, it probably sounds like a good deal, with monthly payments often less, perhaps substantially, than the monthly premiums for insurance sold through MNsure and other trusted marketplaces.
But the National Association of Insurance Commissioners has long warned that the health ministry’s plans “are not insurance.” Consumer protections provided by the Affordable Care Act do not apply, and in some states, ministries can fall through the regulatory cracks.
That can mean big problems. “HCSM is not obligated to pay member claims,” the Commonwealth said in a new notice last week. Coverage for pre-existing conditions such as cancer, diabetes or asthma may be excluded. So could other needs, such as preventive care or mental health treatment. In contrast, traditional medical plans “must cover essential health benefits and all pre-existing conditions.”
The regulatory gray area in which HCSMs operate has provided little visibility into their operations. But in 2022, Colorado lawmakers passed a measure requiring the state to collect data on them. State regulators have published two annual reports since then. Open enrollment is a smart time to highlight results:
- In 2021, nearly 68,000 Colorado residents were enrolled in an HCSM. It is about 30% of those who bought insurance in the state for themselves that year, an alarming number.
- Annual medical claims far exceeded what HCSMs paid—$362 million in medical claims were submitted, while $97 million in fees were collected—enough to pay 28% of members’ medical costs. The HCSM argues that the $362 million includes duplicate and ineligible charges and does not reflect discounts or what members have agreed to pay. But even when I adjust this sum to reflect that, the amount collected by the HCSM covers only 74% of the total requests for eligible actions. Translation: Members are at risk for significant out-of-pocket medical costs.
- Many HCSMs said they exclude important types of medical claims, such as those for mental health and alcohol use, ADHD treatments, contraceptives or prescription drugs for chronic conditions. In addition, some maternity care excluded or limited, unless the pregnant woman belongs to a certain level of membership (one probably more expensive) for a necessary time.
- Members of some HCSMs have to ask clinics or hospitals to cancel or discount medical care, or ask for charity care or government assistance before the organization pays the bill.
A recent Commonwealth analysis of Colorado data adds a more troubling perspective. An HCSM recently surveyed members, and found that 42% of them had incomes below 200% of the federal poverty lines. This means that they could probably qualify for medical assistance programs or financial subsidies from the Affordable Care Act. Either could provide low-cost or no-cost coverage without the benefit gaps.
There are HCSMs operating in Minnesota. On Monday, the state Department of Commerce advised “consumers looking for affordable insurance options to research legitimate plans available through MNsure.” Officials also noted that the agency “has the ability to take enforcement action if an unlicensed entity engages in the insurance business.”
Consumers, as always, must be on guard during the open registration, which began on November 1 and lasts until January 15. Minnesotans are also welcome to file complaints with Commerce about insurance or insurance products. They can file a complaint online, via email at email@example.com or call 651-539-1600.
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