Misleading?

Suspicions that insurance companies are misleading consumers about their health insurance options under the federal Affordable Care Act have prompted a state probe by Nevada Insurance Commissioner Scott Kipper.

Kipper acted after a request by U.S. Rep. Steven Horsford, who released copies of Anthem Blue Cross Blue Shield open enrollment letters that Horsford said fail to “accurately communicate to options consumers have when purchasing or renewing their plans.”

“The letters do not list the state exchange, Nevada Health Link, as an option for consumers to purchase health insurance,” Horsford wrote to Kipper in requesting action at the state level. “Only in a footnote do the [renewal] letters briefly mention that customers may qualify for federal subsidies through the exchange. … For example, a letter sent by Anthem Blue Cross Blue Shield of Nevada listed only three options for policyholders: renew a similarly designed plan, do nothing, or shop for a different Anthem plan.”

However, the letter does say—in the main text, not the footnote—that if the customer does choose to keep his or her current plan, “You will not be eligible for financial assistance from the government for your health coverage. Check the [footnote] notice below to see if you might qualify.”

Whether the letters are sufficiently informative is a subjective judgment. The main body of the letters does not go into detail about ACA options. That information appears below the signature and consists of three paragraphs—a boxed note followed by two lengthy footnotes. The boxed note reads, “IMPORTANT: Financial assistance for your health coverage may be available. You could qualify if you have a modified adjusted gross income of $11,490 to $45,960 a year (or $23,550 to $94,200 for a family of four).” The boxed note and the footnotes are in the same size typeface as the body of the letter.

A third letter released by Horsford does mention the Nevada health exchange prominently and in the main body of the letter, but Anthem said that letter was sent to policyholders only after they failed to respond to the first letter.

Anthem said in a statement, “We are one of only two insurers selling products on the exchange throughout the entire state of Nevada. … It is our goal to communicate with members about all of their options so they can make an informed decision. We’ve partnered with local agents, online channels and retail locations to expand information and access.”

Anthem insures about a quarter-million Nevadans and sells policies through the state exchange, NevadaHealthLink.com.

Commissioner Kipper, who had already issued a joint warning with Attorney General Catherine Cortez Masto of the risk of scams when ACA was introduced, spoke with Horsford on Nov. 20, the same day Horsford sent his message and told him he would undertake an inquiry. (Kipper did not return calls seeking comment.)

“Last night, Commissioner Kipper and I had a productive conversation,” Horsford said the next day. “He assured me that the Nevada Division of Insurance is launching an investigation into misleading letters sent by insurance companies to thousands of Nevadans. I trust Commissioner Kipper and his staff will thoroughly review the letters and offer a full report on the situation. Nevadans deserve clear, complete, and transparent options when it comes to their health care choices, not misleading information.”

Horsford noted that another corporation, Humana, has been fined $65,430 by the Kentucky Department of Insurance for offering policyholders a chance to amend their health insurance in a letter characterized by regulators as “misleading.”

In that case, too, the corporation sent letters to 6,543 policyholders that mentioned the state ACA exchange only in a footnote. Some of the matter included in the mailing had not been approved by state regulators. The fine imposed by the Kentucky insurance commissioner came to $10 per letter sent. In addition, Humana was required to send new letters retracting and apologizing for the first mailing and explaining the ACA and all other options in detail, in mailings approved by the state.

Humana’s offense in regulators’ eyes was exacerbated because the corporation’s letter, sent in August, said policyholders had to choose between two options within 30 days, which ended before ACA operations began. As a result, customers had to make up their minds on what to do with their Humana coverage without knowing what they could get through the Kentucky ACA exchange. That was characterized by the insurance commissioner as a high pressure sales tactic.

Humana experienced similar disputes in Colorado and Missouri.

Health writers around the nation have been exploring the problem of insurance corporations and the advice they are giving policyholders.

At Talking Points Memo, reporter Dylan Scott wrote that a Seattle resident who had been anticipating savings under ACA received a letter from her insurer, LifeWise of Washington—a subsidiary of Blue Cross/Blue Shield—that told her she’d be paying another $300 a month for coverage—and made no mention of her options under ACA and only a vague mention of the financial support for which she could qualify. To tie things together neatly, it said she would be enrolled in the more expensive plan “if we don’t hear from you.” (By contrast, the Anthem letters released by Horsford said that if Anthem did not hear from the policyholder, s/he would be kept on the existing policy.) In Washington, the insurance commissioner issued an alert to consumers urging them to explore all options.

Earlier, Trudy Lieberman at the Columbia Journalism Review reported on a Pennsylvania woman who received contacts with her insurer, Aetna, in which “Aetna was asking her to make a choice without all the facts. The company’s letter omitted a crucial factor: the possibility of an ACA subsidy, which would make coverage more affordable. She could only get that subsidy if she buys in the exchange. … That kind of help might allow Carol to buy a better policy than Aetna’s … with more benefits and less cost-sharing.”

The U.S. Department of Health and Human Services has reported that Nevada’s exchange had put 1,217 customers together with policies, as of Nov. 2. That lags far behind other small Western states.