Some Insurance Can Leave Consumers With Preexisting Conditions Vulnerable

By Consumers For Quality Care, on December 6, 2019

Although they offer lower premiums and can seem more affordable, so-called short-term limited-duration insurance plans can have devastating consequences for consumers who may not know they have a preexisting condition, according to a report in the Philadelphia Inquirer.

The Inquirer’s report profiled one man, Peter LaFrance, who ended up with a huge hospital bill even though he had insurance. It started when LaFrance experienced shortness of breath which he later learned was a much more serious chronic condition.

The 57-year-old plumber initially dismissed his shortness of breath as an inevitable consequence of getting older and having smoked as a younger man. But when his symptoms worsened in early 2017, he went to his doctor, who told him to go to the hospital immediately. There, he learned the problem was more serious than he thought: heart failure and type 2 diabetes.

Months after leaving the hospital, LaFrance was shocked to be saddled with $35,000 in medical debt from his visit because his insurance refused to pay. LaFrance’s condition, according to the insurance company, was a preexisting condition. Due to the type of plan that LaFrance had unwittingly purchased, preexisting conditions were not covered.

Once a common practice, denying coverage for preexisting conditions, or medical issues that existed before enrollment, by major medical plans was banned under the Affordable Care Act. But LaFrance didn’t have major medical insurance. He’d mistakenly purchased short-term limited-duration insurance, a type of plan that has become more readily available under the Trump administration. It’s less expensive, but also less regulated, and is allowed to refuse to pay for services related to preexisting conditions.

LaFrance’s case serves as a cautionary tale about short-term limited-duration insurance plans. Even if consumers are aware they will not be covered for preexisting conditions, the definition of such a condition can be broad, and defined by the insurer. Karen Pollitz, a Kaiser Family Foundation fellow, warned of the dangers:

“They can look for anything … they’ve got all kinds of latitude and they will use it,” Pollitz said. “You’re really taking a chance when you buy a non ACA-compliant policy. You’re taking a chance that you’re paying money to be uninsured.”