As Rhode Islandâ€™s health insurance commissioner, Marie Ganim knows a lot about health plans. So when she started to get calls from telemarketers hawking a new type of short-term health insurance, she decided to play along.
When one caller asked her for her name, she gave the first name that popped into her head: her motherâ€™s maiden name.
â€śAnd I made up an address that was not far from my office,â€™â€™ she said.
Ganim was then transferred to what the telemarketer called a Rhode Island licensed agent â€“ or what sounded like an insurance broker.
â€śSo I asked questions,â€™â€™ Ganim said, â€śabout what kind of health insurance?â€ť
The caller rattled off names of some big national health insurers. She pressed for details.
â€śWill this cover me so I wouldnâ€™t have to pay income taxes on it? Itâ€™s legitimate?Â Itâ€™s individual insurance?â€ť Ganim said. â€śAnd they said oh yes, yes, it covers all of those things.â€ť
But Ganim said that wasnâ€™t exactly the case. Â These plans â€“ known in the industry as Short Term Limited Duration plans â€“ generally donâ€™t Â cover prescription drugs or maternity care or many other benefits required in Rhode Island.
â€śThey said, well these policies might not cover mental health services,â€ť Ganim said. â€śAnd in Rhode Island itâ€™s a mandate to cover mental health services.â€ť
Ganim jotted down the brokerâ€™s phone number and passed it along to her agencyâ€™s lawyers to investigate.
â€śThey were trying to sell me a product that I know is illegal in Rhode Island,â€™â€™ she said, â€śand that I know doesnâ€™t meet the basic consumer protections that we require in Rhode Island.â€ť
The health insurance industry says these short term plans are filling an important need for less costly coverage â€“ and it seems sales calls are on the rise.
â€śWe have seen an uptick in the numbers of people who are getting solicited by phone for health insurance,â€™â€™ Ganim said.
So whatâ€™s behind this uptick? Two major changes in Washington. First, Congress repealed whatâ€™s known as the individual mandate. Thatâ€™s the part of the Affordable Care Act that requires every person to carry certain minimum health insurance benefits — or pay a tax penalty. The repeal means people wonâ€™t be penalized if they chose health plans that donâ€™t cover things like prescription drugs or maternity care. Â The second change allows short-term health plans that extend up to a year.
Jack Peacock, a registered Rhode Island insurance broker, said he doesnâ€™t sell short-term insurance plans because he thinks they would cost him clients. â€śIn their mind they think theyâ€™re buying a health insurance plan,â€™â€™ he said. â€śThen all of a sudden something happens and it doesnâ€™t cover much of anything. And then you know who gets sued? Me. So I just stay away from products like that.â€ť
Ganim, the health insurance commissioner, supported state legislation similar to that enacted in New York and New Jersey that would have required short-term plans to include the same consumer protections as other insurance plans. The bill passed the Rhode Island Senate but died in the House. Ganim said she plans to try again next session.
In the meantime, she said, consumers need to be cautious. And she says sheâ€™ll keep answering callers offering insurance with more questions of her own.
More information about Rhode Island health insurance is available by calling the insurance commissionâ€™s consumer hotline: (401)270-0101.
Â Short-term policies typically:
Source: Kaiser Family Foundation.