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  • Inge Johnstone

CMS Announces New Rule on Junk Medical Insurance Policies

The Centers for Medicare and Medicaid Services has passed new regulations to protect consumers from misleading medical insurance policies. Consumers have been victimized by the marketing of misleading health insurance policies for the past decade as certain marketers and insurers began selling insurance policies that they marketed as comprehensive health coverage but which left consumers holding the bag on tens and sometimes hundreds of thousands of dollars in medical expenses. I have represented and am currently representing policyholders in cases against these companies.

One misleading practice that these insurers follow in order to get around the Affordable Health Care Act requirements for coverage is attempting to sell their products as Short Term Limited Duration Policies that typically have six month coverage periods. They then sell packages of these policies at the same time and claim that they are providing three years of coverage. I have seen this referred to as a "six-pack." If a policyholder develops an illness in or injury in the first six months, then the insurer might claim that it is a "pre-existing condition" and therefore not covered in the second period.

This article from JD Supra explains the new regulations in detail. Good article!

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