- Office of Attorney General Maura Healey
Media Contact for AG Healey Leads Coalition Opposing Expansion of Low-quality Health Insurance Plans
Boston — Attorney General Maura Healey led a coalition of 17 states with New York Attorney General Eric Schneiderman in opposing a proposed rule by the U.S. Department of Labor (DOL) that would allow associations to market low-quality healthcare plans nationwide and avoid the quality controls of the Affordable Care Act (ACA).
In a letter, the coalition urges the DOL to withdraw its plan to expand the criteria for the formation of Association Health Plans (AHPs) under the Employee Retirement Income Security Act (ERISA), arguing that the change would increase the risk of fraud and undermine health insurance markets. The AGs argue that AHPs have a long and notorious history of fraud, mismanagement, and deception. Over decades, Congress has legislated – including through ERISA and the ACA – to protect health care consumers from this fraudulent conduct.
“Massachusetts has led the country in securing access to high-quality healthcare for all residents,” said AG Healey. “This proposal undermines decades of bipartisan work to ensure that all residents in Massachusetts have access to the healthcare they need when they need it.”
The AGs argue in their letter that the proposed rule would invite fraud and wrongdoing in the health insurance market and would undermine critical consumer protections. Broadening the availability of AHPs will likely result in additional fraudulent AHP behavior and the insolvency and unpaid claims that have often accompanied it.
The AGs also caution that the proposed rule, if finalized, will lead to several million enrollees in some states shifting out of the ACA’s individual and small group markets into AHPs.
“We’re proud that Massachusetts continues to serve as a model when it comes to bipartisan support for quality, affordable health care,” said Andrew Dreyfus, president and CEO of Blue Cross Blue Shield of Massachusetts. “As Attorney General Healey expressed today, that spirit of bipartisan collaboration is critical as we continue our work to protect the meaningful coverage gains we’ve secured across the Commonwealth.”
“As Massachusetts’ safety net provider of care to children, Boston Children’s Hospital applauds Attorney General Maura Healey for raising these concerns,” said Sandra Fenwick, President and Chief Executive Officer of Boston Children’s Hospital. “We treat children from all over the country with complex medical needs. They and their families depend upon high quality, comprehensive, and affordable coverage, and timely access to pediatric specialists when needed. This proposed rule risks reversing all the progress our state and country have made in improving coverage for our children.”
“Association Health Plans have failed in the past, and they ought to have no place in our future,” said Dr. Donald Berwick, former Administrator for the Centers for Medicare and Medicaid Services. “These plans undermine the Affordable Care Act’s protections against inadequate health care insurance policies that let people down when they need help the most. I am glad to see Attorney General Healey stand up for our state and our tradition of quality, affordable health care.”For more than a decade, the AG’s Office has worked to ensure that all residents get access to high-quality healthcare that is mandated under state law and has taken action to stop the deception of consumers through AHPs, including the following cases:
- In 2015, Unified Life Insurance Co., agreed to pay $2.8 million in restitution and civil penalties as a result of its deceptive and unlawful selling of sold short-term health insurance that was not authorized for sale in Massachusetts, but which it deceptively marketed through a third-party association.
- In 2011, the United States Life Insurance Company in the City of New York agreed to pay full restitution to consumers whom it required to join associations and to whom it misrepresented the terms, benefits, and (very limited) coverage provided by its plans, as well as the fact that the policies had not been approved for sale in Massachusetts.
- In 2009, pursuant to a consent judgment following Massachusetts’ consumer protection lawsuit, HealthMarkets, Inc. and its subsidiaries were ordered to pay $17 million, resulting from unfair and deceptive practices through the sale of insurance products packaged with memberships in three different associations.
- In 2007, the operators of an association that deceptively marketed its discount health plan products to Massachusetts residents as “Affordable Healthcare Plans” and “Top Rated Insurance” were ordered to pay restitution to the defrauded consumers, a substantial civil penalty and attorney’s fees, and were permanently enjoined from engaging in various conduct in Massachusetts.
Other attorneys general joining Massachusetts and New York in sending this letter include those of California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, New Jersey, New Mexico, Oregon, Pennsylvania, Vermont, Virginia and Washington, D.C.