Buyer Beware: Non-ACA-compliant health plans may be marketed on TV to the newly uninsured as comprehensive insurance
Sarah Perez-Sanz and Margaret Tait
The Issue
With millions of Americans newly experiencing unemployment related to COVID-19, many are also suddenly without employer-sponsored health insurance coverage (ESI). Research has found that anywhere from 14.6 million to 18.4 million to 26.8 million individuals (policyholders and dependents) face losing ESI coverage as a result of the pandemic. While some health plans may provide benefits comparable to ESI, other options mimic comprehensive coverage and confuse stressed shoppers. Indeed, a report from the USC-Brookings Schaeffer Initiative for Health Policy and an article from ProPublica highlight evidence of misleading marketing tactics used during the pandemic.
Loss of ESI actually qualifies people for a special enrollment period on Healthcare.gov and state marketplaces, and some states even extended their enrollment periods to accommodate for loss of income or other disruptions related to the pandemic. In fact, the 2021 open enrollment period (OEP) is happening right now until December 15, 2020. Marketplace options are, by definition, compliant with the Patient Protection and Affordable Care Act (ACA): they are required to cover ten essential benefits as outlined by the ACA and offer subsidies based on an individual’s income.
But the future of the ACA is uncertain. Even while millions of newly uninsured Americans have found the ACA to be a safety net, the Trump Administration has renewed their attack on the law. On its own, repealing the ACA would cause 20 million people to lose their health insurance coverage. Combined with the loss of ESI due to the pandemic, this could result in a staggering surge in uninsurance. Given the current public health and economic crises, a repeal of the ACA has potentially devastating implications for Americans, the health care system, and ever-important public health efforts.
Due to limited federal investment in advertising, promotion of inadequate health insurance products by the Trump Administration, and waning public awareness of the OEP, newly uninsured people or those shopping for a new plan are particularly vulnerable to misleading marketing of non-ACA-compliant health plans. Other options outside of the marketplace, like health care sharing ministries (HCSMs) and short-term limited duration plans (STLDIs), are not compliant with the ACA and so do not offer comprehensive benefits. In fact, HCSMs are not even insurance products. These options can appear to be normal insurance, potentially confusing newly uninsured consumers who may not have the time or capacity to explore them in much detail. Without adequate health insurance regulation, consumers are on their own to understand the different products being marketed to them.
State Responses
Under ACA regulation, STLDIs were allowed as temporary coverage for up to three months. The Trump Administration rolled back these rules in 2018, allowing STLDIs to provide coverage for up to twelve months, with options to renew or extend. While these changes have been upheld in court, some states adopted limits for how long individuals can be covered through STLDIs. State responses were intended as protection against inadequate products and as a way of upholding the individual health insurance market, which was the role of the individual mandate, before that provision of the ACA was repealed in 2017.
Similarly, state regulators have acted to limit the sale of HCSMs. California Insurance Commissioner Ricardo Lara has ordered two companies, Trinity Healthshare and Aliera, to stop marketing and selling plans in the state, and similar action was taken in New York state. Prosecutors in Missouri claim Trinity HealthShare and Aliera “sold inherently unfair and deceptive health care plans to Missouri residents, and failed to provide them with the coverage the purchasers believed they would receive.”
Appeals to Consumers
It is important for regulatory and advocacy efforts to consider how consumers learn about health insurance and how health insurance and health insurance-like products are marketed to consumers. Previous research of STLDI internet marketing found that searches for “Obamacare plans” or “ACA enroll” usually yielded results directing consumers to STLDI products or brokers that pressure consumers to sign up without providing much information. Television advertisements offer another way for consumers to learn about health plans that are not compliant with the ACA.
To understand these marketing appeals, a team of graduate student researchers at the University of Minnesota School of Public Health (UMN-SPH), in partnership with the Wesleyan Media Project (WMP), performed a primary content analysis of health insurance television advertisements (N=749) that aired 386,914 times across the U.S. before, during, and after the 2019 open enrollment period.
Our team was surprised at the content and tone of ads for non-ACA-compliant plans. To be clear, there were few ads in our sample that we coded affirmatively as marketing non-ACA-compliant plans — 18 ads of the 749 that we coded. The non-ACA-compliant ads in our sample aired 2,832 times in 2018; all aired between January 1 and December 15.
These ads included negative messages about health insurance and messages about the cost of coverage more than did other ads in the sample. For example, some ads appealed to the viewer to consider if the cost of their health insurance was associated with their poor physical or mental health. Many ads did not reference specific plan details aside from the low cost, and instead prompted a viewer to call a phone number to learn more.
We found that ads for non-ACA-compliant plans referenced the “Affordable Care Act” or “Obamacare” more than did ads for other types of plans, perhaps in an effort to establish their own legitimacy as a health insurance product or to bolster negative sentiment about the health care law. We also observed that ads for non-ACA-compliant plans emphasized messages about plan options with an undertone of deservingness: that those who pay for their own health insurance deserve the opportunity to choose a plan that works best for them. Marketing appeals about the choice of plans and multitude of options available appear in ads for ACA-compliant plans, too, according to our analysis. Such a similarity in messaging tactics, despite marketing different products, raises concerns for how consumers may confuse these plans for one that is ACA-compliant.
The Takeaway
While our study examined ads aired in 2018, an initial look at the ads from 2019 suggests that the same sponsors of non-ACA-compliant products may still be airing ads now. The increasing number of newly uninsured individuals necessitates continued elevation of warnings to state regulators as well as an imperative to provide a cautionary tale to those working as enrollment assisters, agents, and brokers. When helping the newly uninsured navigate their coverage options (or when navigating it yourself), remember the following:
Products that comply with the ACA and provide comprehensive coverage are not likely to defame health insurance or the law in their advertising. Consider negative references to health insurance or the ACA as a signal that the product may not be ACA-compliant health insurance.
Search engines can be powerful tools, important to use for initial queries and as you check the fine print of plan details. But, just as in a search for the best take-out options, content placement can be bought. Results near the top of an insurance search list may just have the biggest advertising budgets. And consider the absence of a website with more information problematic: an insurer or broker without a website is a red flag.
Healthcare.gov is (still) a powerful tool, as are websites for state-based marketplaces. Federal budgets for television advertisements for Healthcare.gov and other resources have been slashed, but the tools still exist. Assisters now have an important role to play reminding people of these resources. If a broker, agent, or plan representative is unwilling to discuss plan details, chances are the details aren’t great.
This project was funded by the Russell Sage Foundation and led by Co-Principal Investigators Erika Franklin Fowler of WMP and Sarah Gollust of UMN-SPH. The authors also acknowledge research contributions from Cynthia Pando, Cydney McGuire, and Laura Baum.