A guy calls you on the phone and says, “I can give you amazing health insurance for a fraction of the usual price.” It sounds like a deal, so you buy the 80-20 short term medical policy and they start taking the premiums out of your bank account. Months later, you get sick and wind up in the hospital. The bills go to your new insurer, but nothing happens. Months go by, providers are calling you about the bills, you’re calling the company, they keep giving you the run-around.

Eventually, they say you need to give them the name of every doctor and hospital you have seen in the last five years, so they can request all your medical records. Meanwhile, they pay nothing. This goes on and on. Your policy expires. Your bills still haven’t been paid. You call the insurance commissioner; you hire a lawyer. Finally, they process your claims, except they don’t cover most of your bills because they say it’s a pre-existing condition. The bills they do pay are steeply “discounted” so instead of 80 percent, the insurer pays more like 25 percent. This actually violates the policy, but the claims handlers don’t even know what the policy says.

Welcome to the world of short-term medical insurance. It has been aptly called “junk insurance” because if you get sick or injured, it isn’t worth much. The leading band of companies marketing these products through the internet and call centers has a stack of complaints against them here in Montana and more than 40 state insurance departments investigating them. Bad insurance, often sold by bad companies, engaging in bad practices. Take the money and run.

Experts in the Montana Insurance Department have made some of these companies give consumers their money back and even stop selling here in Montana. Unfortunately, despite this, Commissioner Matt Rosendale has been saying publicly this kind of insurance is the solution to our problems. I respectfully strongly disagree because I have seen how these STM policies hurt people all across our state.

Short-term junk plans do not protect people with pre-existing conditions. In fact, policyholders who get sick can be investigated by the insurer to determine whether they have a pre-existing condition. As described above from real cases here in Montana, payments get delayed for months in the meantime and, if the company finds something to hang their hat on, they refuse coverage or rescind the policy altogether. Half million Montanans, including 54,000 children, live with a pre-existing condition and could lose everything under these junk plans.

STM junk plans are also typically don’t cover essential health benefits. These can include maternity care, prescription drugs, mental healthcare, and preventative healthcare; benefits are usually capped at $1 million or less. Insurers can also impose annual limits, or even lifetime limits. Short-term junk insurers can also cancel coverage after patients file claims.

The Affordable Care Act protects policyholders from being denied coverage due to a pre-existing condition, ensuring half of Montanans can access healthcare. ACA rules help make sure the policies you buy cover essential medical care, pay your bills promptly, and don’t allow retroactive cancellations of coverage. If it were not for the ACA, Montanans would be at risk of losing their health insurance and access to care. Short-term junk insurance means less health coverage, more medical bankruptcies and more scams.

Commissioner Rosendale, I urge you to rethink your position on these STM junk insurance products. The stakes are too high. Here’s a different idea: let’s start working together to make the ACA work even better for Montana.

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John Morrison served two terms as Montana's state auditor and insurance and securities commissioner, from 2001-2009. 

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