Registrars are seeing many more patients presenting with insurance cards that look valid but turn out to offer little or no coverage.
“The Trump administration has allowed the sales of plans that might not cover much of the care people need,” says Allison K. Hoffman, JD, professor of law at the University of Pennsylvania.1,2
The most common of these, typically called “junk” plans, are short-term offerings. “These plans were intended as temporary stop-gap measures, not longer-term coverage,” Hoffman reports.
Initially, the plans were limited to three months. The Trump administration redefined “short-term” to allow these plans to last for 364 days, with renewal for up to 36 months. “The problem with these plans is that they don’t have to cover the same benefits as required for other plans under the ACA [Affordable Care Act], known as essential health benefits,” Hoffman explains.
Certain plans exclude pre-existing conditions and cap coverage levels at tiny amounts. Many are stuck with significant out-of-pocket costs for benefits that are not covered, or costs above the allowable limit. “If a patient cannot pay, the hospital will have to manage the debt,” Hoffman observes.
Three million people were enrolled in short-term limited duration insurance in 2019, a 27% increase from the previous year.3 After the ACA, says Hoffman, “most hospitals saw a higher number of patients with decent insurance coverage. If a large number of people opt for short-term plans, which are considerably cheaper than ACA-compliant plans, the tide might turn.”
This makes life difficult for patient access. Registrars are the bearers of bad news to patients who do not realize their health plan is “junk.”
“We definitely are seeing an increase in plans with very limited or no coverage,” says Sarah Clark, senior director of registration and financial counseling at Spectrum Health West Michigan. Clark details certain plans her department is handling:
• Narrow network plans. “Individuals are trying to do the right thing in balancing the cost of premiums with what they can afford. They don’t realize it will limit which providers they have coverage for,” Clark says.
It is only when people schedule needed care that they learn the coverage does not include the hospital. “Their options at that point are rather limited,” Clark adds.
Patients who paid their monthly premiums in good faith are understandably frustrated and angry. Some insist the registrar is wrong about their coverage, or demand to know why the hospital will not accept the coverage. “Many ask, ‘Why didn’t somebody tell me this?’” Clark reports. Staff redirect the conversation toward finding options for the patient. “Most of the time, at the conclusion of the interaction, the patient is actually very grateful for the education they received,” Clark notes.
If patients really cannot wait for care and do not want to go to a different hospital, they are classified as self-pay. “Most of the time, they seek care at a facility that’s in-network, which maybe isn’t what the patient wants at all,” Clark says.
Sometimes, people can delay scheduled care, with the intent of obtaining better coverage. Usually, they have to wait for the next open enrollment period to do so — but not always. “We may be able to identify a qualifying circumstance to allow them to select a new plan right away,” Clark offers. To prevent future problems, every time staff identify a narrow network plan, it is added to the registration system. “A pop-up alerts the registrar,” Clark says.
• Faith-based membership plans or ministry-type funds. “These are being marketed as an alternative to insurance during open enrollment periods,” Clark explains.
The plans are attractive to consumers because of low premiums and what seems like good coverage. In reality, this is not insurance at all. “The hospital has no contracted agreement with them,” Clark says. “Individuals see it as an option that would provide them with coverage, and it just does not.”
The plans are notoriously hard to detect, even for experienced registrars. The membership cards look exactly like valid insurance, even down to the terminology used. “The registration specialist enters it in as a health plan without identifying it,” Clark says.
Unfortunately, for most who present with these plans, their income is well above federal poverty levels. Even if a patient is low income, he or she still may own too many assets to qualify for charity care. There really is nothing the hospital can do to secure reimbursement on behalf of the patient. “The patient is left to negotiate with the members or the board of directors in the fund on what sort of payment will be available,” Clark says.
(Editor’s Note: We first reported on these so-called “sharing ministries” plans in the August 2019 issue. Read more about these plans here.)
• Indemnity plans with only outpatient coverage or limited inpatient benefits. Certain health plans cap inpatient benefits at a paltry $500. “People select a plan with limited coverage because it’s all they can afford. They are essentially uninsured,” Clark laments. Patients pay a monthly premium, only to find out they are responsible for virtually all of their bill. Whatever the situation, the earlier registrars handle it, the better for everyone. Clark highlighted these processes her department put in place:
For scheduled services: The hospital bill is sorted out in advance. No one has to deal with health insurance coverage issues on the day of surgery or when they are home recovering. “We are really active on doing a review of coverage as early as possible,” Clark says.
For unplanned services: Staff have an in-person conversation about the financial situation. “This gives the patient options on whether to proceed or delay care,” Clark explains.
The department goes even further by trying to avoid the problem of people choosing bad health plans in the first place. A team of Certified Application Counselors help patients during the annual open enrollment period. “We are out in the community hosting events, and helping patients to find a solution that provides good coverage,” Clark says.
It helps that financial counselors are trained in de-escalation and empathy, and put themselves in the patient’s shoes. “These are individuals who went through a process with all the right intention to do the right things [and] have been left with coverage gaps,” Clark says.
Spectrum created some scripted guides that are somewhat helpful when staff are searching for the right words. “But given the uniqueness of every circumstance, it’s not a robotic approach,” Clark notes.
Staff are trained to listen to the patient’s entire story without interrupting. “We can sometimes identify some paths to coverage that they didn’t see before,” Clark suggests.
One patient needed emergency surgery for an eye injury sustained while working on his car. The patient discovered his health plan included minimum coverage. “The financial counselor was able to help the patient realize that there was some coverage available through his auto insurance plan,” Clark says.
- Abutaleb Y. Critics say ‘junk plans’ are being pushed on ACA exchanges. The Washington Post. Nov. 20, 2019. https://wapo.st/2YLG6OP
- U.S. Senate. Letter to Centers for Medicare & Medicaid Services and Department of Health and Human Services. Nov. 20, 2019.
- U.S. House of Representatives. Committee on Energy and Commerce. Shortchanged: How the Trump administration’s expansion of junk short-term health insurance plans is putting Americans at risk. June 2020.