Three congressional committees launched an investigation Wednesday into a dozen health insurers’ “concerning practices” related to their offerings of short-term, limited-duration insurance health care plans.

The troubling practices include denying coverage and misleading customers, according to a press release from the House Committee on Energy and Commerce, one of the committees that has begun to investigate how insurers, among them industry giants Anthem and UnitedHealthcare, and 10 other companies are selling and administering  short-term health insurance plans. 

Also on Wednesday, the Iowa Insurance Division filed a regulatory settlement agreement with Health Insurance Innovations, a Florida-based health insurance company that sells short-term limited-duration health policies. Without admitting wrongdoing, the company agreed to pay a multistate settlement of $3.4 million, which will be shared by the 43 states participating in the agreement. As part of the agreement, the company agreed to provide to the states within 90 days a written compliance plan on how it will change its sales practices. The agreement caps a more than five-year investigation into the company’s practices.

Health Insurance Innovations is one of the 12 companies whose short-term health plan practices are now being investigated by congressional committees. Last year, federal regulators revised rules that broadened the coverage periods for which insurers can sell these policies. 

To continue reading this Insider story about the investigation, click here. 

Energy and Commerce Chairman Frank Pallone Jr., a New Jersey Democrat, Health Subcommittee Chairwoman Anna Eshoo (D-Calif.) and Oversight and Investigations Subcommittee Chair Diana DeGette (D-Colo.) are leading the investigation.

“The Committee’s initial examination of these plans has yielded disturbing information about how insurance companies that sell [short-term limited-duration insurance] discriminate against individuals with pre-existing conditions and put consumers at significant financial risk,” the Democrats wrote. To see the letter sent to UnitedHealth Group, click here.

“Additionally, we are troubled that consumers who sign up for these plans are being misled about the nature of the coverage they are purchasing. Consumers are being denied coverage even for medical care that is rightfully covered under the terms of their contract, through a process known as post claims underwriting.”

As part of the congressional investigation announced Wednesday, federal lawmakers have requested documentation from the 12 health insurance companies, seeking information about the plans’ application and underwriting practices and how the plans are marketed to consumers, among other information.

Federal regulators revised rules last August to enable health insurers to issue short-term, limited-duration policies with terms of up to one year, and allowed them to be renewable for up to three years.

The Iowa Insurance Division recently issued administrative rules governing short-term, limited-duration health insurance policies, which became effective Feb. 20. Those rules require insurers offering the policies in Iowa to provide a minimum $500,000 in health coverage. The rules also limit policyholders’ out-of-pocket maximum to no more than $5,000 for each month of coverage, up to a maximum of $20,000 for the full policy term.

Currently, six insurance companies offer short-term plans in Iowa, and at least two of those companies are among the 12 that are being investigated by the congressional committees. 

No companies are yet issuing plans under the brand-new state rules, according to the Iowa Insurance Division. 

"Short-term limited-duration policies may not be right for every consumer, but the lower cost associated with the plans may better fit the individual needs of certain individuals,” said Chance McElhaney, communications director for the Iowa Insurance Division. “This may be true especially for the many Iowans currently priced out of the [Affordable Care Act] health insurance market. We encourage Iowans to talk with a licensed insurance agent prior to purchasing any health insurance coverage to fully understand what is and what is not covered by the policy.” 
McElhaney said that any further investigations that may be ongoing by the division are confidential until completed.

Iowans should also check to determine whether the seller is licensed in the state, as many scams involve unlicensed sellers. The division can also address any questions or concerns about a policy being marketed, sold or that may have previously been purchased, he said.

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