Insurance companies have sent misleading cancellation notices to consumers and provided little or no information about the health insurances exchanges, Talking Points Memo reported.
The article points to LifeWise Health Plan of Washington, which told members that their existing plan would get cancelled to comply with healthcare reform, but if members did nothing, they would automatically switch to a new plan that was the "closest match" to their current coverage. The letter made no mention of the health insurance exchanges as a place to shop around for other insurance options, TPM noted.
"If we don't hear from you, we'll automatically move you to this plan and you'll be covered starting January 1, 2014," the LifeWise letter states.
LifeWise said it assumed its customers know about other coverage options, given all of the advertisements for the Washington exchange, a spokesman for LifeWise told TPM.
But some state insurance regulators and industry experts claim insurers are using "confusing" letters to move existing customers into more expensive plans before the exchanges become fully operational, TPM noted.
For example, Humana and Anthem Blue Cross came under fire from Kentucky insurance officials who said the insurers sent "misleading" renewal letters to their individual members that improperly conveyed a sense of urgency.
Kentucky Insurance Commissioner Sharon Clark ended up fining Humana $65,000 for the misleading information, TPM reported.
Moreover, the letters could show how insurers can take advantage of an obscure loophole in the healthcare reform law that lets them avoid covering additional mandated benefits by getting their members to renew their policies for an extra year, FierceHealthPayer previously reported.