May 7, 2025 • 18 mins
A few years ago, a former sitcom writer came up with a weird way to sell Americans cheap health plans, using a loophole in the Affordable Care Act. More than 100,000 households have signed up, but many say the coverage isn’t what they were promised.
On today’s Big Take podcast, Bloomberg reporter Zach Mider shares what he learned while investigating the plans and what it could mean for the American health-care system if more people turn to them.
Read more: A Former TV Writer Found a Health-Care Loophole That Threatens to Blow Up Obamacare
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
Sarah Strominger and her husband Joe had always gotten health
insurance through Joe's union job, but last year, Joe left
that job to start his own small business, and that
meant the couple had to shop for a new health plan.
Speaker 3 (00:23):
We just started googling and looking up insurance brokers, and
they started flooding our.
Speaker 2 (00:31):
Phone, Sarah says. Once they filled out a form requesting
a health insurance quote, they were inundated by telemarketers calling
with enticing offers promising great cheap health plans, plans those
agents said would cover the couple's expensive medical needs.
Speaker 3 (00:48):
My husband has a small brain tumor on his pituitary glands.
He also is pre diabetic, and I have mental health
insurance coverage I needed, and basically we were promised that
all of that was going.
Speaker 2 (01:04):
To be covered, Sarah says. A telemarketer found them a
plan and convinced them to pay for a full year's
coverage upfront for almost nine thousand dollars, But over time
they realized the plan wasn't what they'd been promised. The
first sign came when they called the pharmacy for Joe's
blood sugar medication, which costs fifteen hundred dollars a month
(01:24):
out of pocket.
Speaker 3 (01:25):
We slowly found out that none of our prescriptions were covered.
We started getting his blood work bills back in the MA,
also his lab four thousand dollars a pop. So slowly
just talking to doctors and realizing that none of this
stuff is being paid.
Speaker 2 (01:44):
The straw Mangers are just one of more than one
hundred thousand US households that have signed up for similar plants,
and Bloomberg zach Mider says it's a growing, largely unregulated
corner of the healthcare industry that's leaving many Americans without
the coverage they need.
Speaker 1 (02:00):
It's a kind of health plan that falls in this
basically legal no man's land where nobody claims to be
able to regulate it in most states, and essentially all
the rules that are set up to kind of govern
our health system in the US don't apply to it.
Speaker 2 (02:20):
I'm Sarah Holder, and this is the big take from
Bloomberg News today. On the show the health plans that
have some Americans feeling dooped, we dig into the telemarketing
group selling them the legal loophole that's let them flourish
and what it could mean for the American health system
if more people turn to them. The story of how
(02:45):
the Stromongers ended up getting sold a health plan that
resembled health insurance but wasn't actually starts with an idea
from one man, Bill Bryan. Who is he and how
did he come up with us?
Speaker 3 (02:58):
Sure?
Speaker 1 (02:58):
So, Bill Brian is actually For most of his career
he was a comedy writer. He wrote for night Court
and Coach and other sitcoms of the eighties and nineties.
And after his successful career as a comedy writer, he
gets into real estate investing and eventually ends up being
fairly wealthy guy and gets really involved in making different
(03:21):
kinds of business investments, and he comes across this idea
to sort of fund this new way of financing healthcare
in America. The idea is that Obamacare is too restrictive, right,
The cheapest plans you can buy are too expensive. They
have these super high deductibles, which means they're not of
much use, especially for people who are just well off
(03:42):
enough that they don't get the subsidies, and who are
self employed or gig workers. They can't get health insurance
through their employer. There's over twenty million people in America
who don't have health insurance, and so he sees this
opportunity if you could provide something that was less expensive
than Obamacare, that was more affordable for people like that,
(04:03):
people like the stro Mangers.
Speaker 2 (04:05):
But what did that look like in practice? What did
he do?
Speaker 1 (04:09):
So typical health insurance in the United States, if you're
buying it as an individual in the marketplace, as opposed
to just getting it from your job, it has to
meet all the standards of the Affordable Care Act, which
means it's got to cover pre existing conditions, and it's
got to meet this checklist of ten items that has
to cover, like hospitalization and emergency room visits, Joe, basic
(04:32):
stuff like that that you think of as like health insurance.
If you are an employer and rather than bring in
an insurance company to provide insurance for your employees, you
just do it yourself. You say, here's a copy of
the plan, here's what we'll cover, and we'll just fund
it out of our pocket. There's no insurance company involved.
Almost all those Obamacare rules I talked about do not apply.
(04:54):
It can be basically anything. And so what these guys
are doing is say we're going to have that arrangement
with our customers. So when we call these people up
on the telephone and sell them a health plan, they're
actually going to become employees of us. And so then
we can offer these health plans that don't meet all
those minimum requirements under the law.
Speaker 2 (05:18):
So essentially these plans are employing people.
Speaker 1 (05:23):
I can see why you're confused, and it is super confusing. Okay.
So the idea is that when a salesman calls you
up on the telephone says, hey, would you like a
health plan and you say yeah, sure, in the process
of that conversation, you are actually becoming an employee of
this random company with a name like Outreach Data Partners LP.
(05:44):
And your work for them is going to be downloading
an app on your phone and using it maybe to
like browse the Internet or something. And by agreeing to
do that work, and also by signing a bunch of
papers and stuff, you are now an employee for legal
purposes of this company, and so they can sell you
this plan that they couldn't sell you unless you were
(06:06):
an employee.
Speaker 2 (06:07):
Wow. So instead of buying health insurance, you are basically
applying for a job at this company without even knowing it,
and that company is giving you insurance, although.
Speaker 1 (06:18):
To be clear, you're paying full freight. Most companies cover
at least some of your health care costs. Here you're
paying the full amount. The idea was to come up
with a way to sell health insurance. It was more affordable, right,
and this was the vehicle to do that. And so
once they come up with this idea, they go to
the government, the Department of Labor, and they say, we
think that these plans comply with the employee benefits laws
(06:40):
for regular employees, and so we think that this is
an insurance and we could be able to sell these
without having to comply with insurance laws.
Speaker 2 (06:48):
So the Labor Department agrees this is a legal way
to offer coverage to people.
Speaker 1 (06:56):
No, the Department of Labor said, it's not. They basic
he said, these people are just buying health insurance. This
isn't an employee relationship. And so that kind of kicked
off a now five year legal battle between Bill Brian
and his allies and the Department of Labor, which still
is going on. It's still not a resolved issue. But
(07:17):
meanwhile Brian started selling these plans in the market. So
even though the kind of underlying legality is still being
sort of fought over. He's actually selling them through telemarketers.
Speaker 2 (07:30):
You mentioned that Bill Brian part of his pitch and
his promise with this new form of insurance was that
it would be cheaper and it would offer new options
for people. How has that worked out in practice.
Speaker 1 (07:41):
There's different ways of looking at cheaper. Certainly in terms
of the ticket price of these plans versus an Obamacare plan,
they're usually less, right, like the dollars you pay per
month to just have the plan is a lot less,
and they're typically no deductibles or low deductibles for a
lot of services. So in that way they're more affordable.
But if you look at the amount of actual medical
(08:02):
coverage that's being funded by those plans, you know, I
found one plan where it was something like twenty five
percent of the monthly cost that the person was paying
was actually going to the cost of the medical care.
So most of the rest of that money was going
to commissions and other kind of fees collected by middlemen
such as the sales agencies. So sales agencies like these
(08:25):
plans because they can add a big commission on top
and they're still cheaper than Obamacare, so they can sell them.
Speaker 2 (08:31):
And is that something that would be allowed under Obamacare.
Speaker 1 (08:33):
No, under Obamacare, you can't spend less than eighty percent
of the customer's premium costs on actual care.
Speaker 2 (08:42):
Zach says. Despite Brian's ongoing legal dispute with the Department
of Labor, which is now playing out in court, and
despite the shortcomings of these plans, agencies have sold a
lot of them.
Speaker 1 (08:54):
We can tell just from Department of Labor statistics that
over one hundred thousand people have been signed up across
the most of them quite recently. And because Bill Brian
has had some success in his court case, even though
it's not resolved, that's inspired a lot of copycats who
are doing a similar kind of thing to what he's doing.
In fact, there's probably more of them now than there
(09:15):
are people signed up for Bill Brian's plans. Labor Department
says we don't regulate them because they're not employees, but
a lot of state insurance regulators who would normally regulate
them are saying those fall under Department of Labor. We
can't regulate them, and so in a lot of states
there's really no one who is regulating.
Speaker 2 (09:34):
Them, so they're caught in this kind of legal gray
area for now. Absolutely we get into the consequences of
that legal gray area and what the government might do
about it. After the break, I've been speaking with Bloomberg
(10:02):
reporter Zach Meider about a new kind of health plan
that offers less coverage than is required of other policies
in the marketplace after creating an employment relationship with its customers.
For now, the Plans live in this legal gray area,
and their business model, which relies on a vast network
of telemarketers, might sound just as complicated, but Zach says,
(10:25):
you can think about it like the car industry.
Speaker 1 (10:28):
There's a car dealer and there's the car.
Speaker 2 (10:30):
In this analogy, Bill Bryan, the guy who came up
with the earliest version of the Plans, is the car maker.
Speaker 1 (10:36):
But he's making a kind of car that, for various reasons,
regulators can't really figure out if anyone is responsible for
regulating it, and so that makes it different from other
cars on the road.
Speaker 2 (10:48):
But there are other people responsible for selling what Brian
and other copycat companies are making, and.
Speaker 1 (10:53):
A lot of the concerns we hear about the way
people are selling it right. Are they saying it's a
Cadillac when it's a less valuable car, that kind of thing.
Speaker 2 (11:02):
And in the case of the stromengers, the car dealer
or telemarketer who sold them their plan was employed by
another company called Quick Health.
Speaker 1 (11:12):
Which is based in Pennsylvania. It's call center. There's people
there work in the phones, calling people all over the
country trying to sell them various health related products.
Speaker 2 (11:22):
A lot of what they were selling were Bill Bryan's
health plans, and according to a former Quick Health employee
who Zach interviewed, the company's salespeople were trained to exaggerate
the plan's benefits, to describe them as comparable to a
Blue Cross or an ETNA plan, but cheaper. The company's
CEO at the time, Arthur Walsh, says the company didn't
(11:44):
misrepresent plans and that it strives to have satisfied customers.
Quick Health's tactics had already gotten it in trouble with regulators.
By twenty twenty four, it had been banned in four
states for using deceptive salescripts, selling with the other a license,
and lying about coverage. Bill Rosh, a Quick Health lawyer,
(12:04):
says the company's regulatory issues were the result of misplaced
blame and mistakes by previous counsel. Sarah and Joe didn't
know about any of this at the time they signed
up for their plan. When they realized the coverage they'd
bought wasn't what they expected, they called Quick Health back.
Speaker 1 (12:22):
And say, hey, this isn't what we signed up for.
We wanted something that would cover all this stuff, and
it doesn't. They eventually get rid of to a different
salesman who says, well, we got to sell you a
slightly more expensive plan that'll cover everything.
Speaker 2 (12:38):
After a series of confusing transactions, the straw Mangers say
they ended up paying even more money and still didn't
get the coverage they needed, and they were unable to
get a refund. Quick Health says it didn't mislead the
straw Mangers, that it frequently gives refunds and that it's
tried to in their case, to avoid getting hit with
more bills. Joe started skipping visits to the tumor doctor.
Speaker 1 (13:02):
So after they kind of realized we're not ever going
to get this money back, they complained to the New
York state insurance regulator, the Department of Financial Services, and
they immediately get an answer that we're just not.
Speaker 2 (13:14):
Going to help you, and what do they do next,
is or anyone else that they can call for any
sort of accountability or recourse. No.
Speaker 1 (13:22):
Essentially, all the rules that are set up to kind
of govern our health system in the US don't apply
to it.
Speaker 2 (13:29):
The stro mangers aren't alone. Hundreds of people have filed
similar complaints with state and federal regulators and the Better
Business Bureau. Many come from customers who say they thought
they were buying a pretty standard health insurance plan at
an affordable cost, who didn't realize they were agreeing to
be an employee of a company they'd never even heard of,
(13:50):
and who came to find out the plans didn't cover
everything the telemarketers promised. Are there people for whom these
plans serve a really important purpose? Are they working for
some people?
Speaker 3 (14:00):
So?
Speaker 1 (14:01):
Bill Brian says that he has thousands of satisfied customers,
and I think for people who really aren't going to
have a lot of medical expenses, you can see why
they'd be attracted to a plan with much lower costs
than like an Obamacare plan. But we buy insurance for
the downside risks, right for something unexpected happening, and it's
hard to tell always like how satisfied people would be
(14:23):
if something actually went wrong.
Speaker 2 (14:24):
What has his reaction been to your reporting that shows
that some of these salesmen are perhaps misrepresenting what they're selling.
Speaker 1 (14:33):
So Brian blames the Labor Department for all this because
he says, look, this ought to be legal. The Labor
Department is fighting us on it, and that means that
we're stuck in this legal gray area where the only
people who are willing to sell it are some of
these telemarketers who might be coloring outside the lines here
and there. And he's trying to cut down on that
(14:55):
and catch the telemarketers that are no good and tell
them they can't sell his product anymore. But he's saying,
if the Labor Department would just agree that these are legal,
then we wouldn't have all these problems. He's also saying
that he's going to try to bring sales in house
and have his own distribution for us so that he
doesn't have to rely on these third party marketers that
(15:15):
might be doing things without his knowledge.
Speaker 2 (15:18):
And what is the status of that Labor Department battle?
How my Trump's Labor department look at this case.
Speaker 1 (15:24):
You may recall that Trump last year during the campaign,
was talking about how he had concepts of a plan
to replace or improve on Obamacare. And we haven't seen
a lot from the new administration about exactly what they
would like to do. But you know, here's a case
where I think Brian and his allies could make an
argument that this would be a sort of back doorway
(15:48):
of deregulating the healthcare industry. And that's been kind of
the dream during the first Trump administration. So you could
imagine a scenario where maybe the Trump administration decides we're
not going to fight this one. We're going to agree
to allow these plans to be sold. Now, we asked
the Department of Labor that you know, there's a new
secretary has just been in there a little while, and
(16:09):
we haven't gotten an answer back as to how committed
they are to continuing this fight or rethinking it.
Speaker 2 (16:15):
If there were to be an explosion in these kinds
of plans in the coming years, how might that impact
other participants in the health insurance marketplace.
Speaker 1 (16:23):
So some of the opponents of this kind of idea,
people like incumbent health insurers and you know, the leukemia
and Lymphoma Society and other kind of organizations like that
are very worried about plans like this becoming more common.
And the thinking is as follows. If these kind of
less expensive plans that don't cover as much were to
peel a lot of really healthy people out of the
(16:46):
Obamacare market, then what would happen is, right now, healthy
people kind of subsidize sick people in the Obamacare marketplace, right,
and so if you take a lot of those healthy
people out, the costs of Obamacare are going to rise,
and that could eventually cause what some people call an
insurance death spiral, where as they become more and more unaffordable,
(17:08):
more people leave, which then eventually makes the whole market
not function anymore.
Speaker 2 (17:18):
This is the big take from Bloomberg News. I'm Sarah Holder.
This episode was produced by Julia Press. It was edited
by Aaron Edwards and Robert Friedman, additional reporting by Zeke Fox.
It was fact checked by Rachel Lewis Chrisky and mixed
and sound designed by Alex Sugia. Our senior producer is
Naomi Shaven. Our senior editor is Elizabeth Ponso. Our deputy
(17:39):
executive producer is Julia Weaver. Our executive producer is Nicole
Beamster Boor. Sage Bauman is Bloomberg's head of podcasts. If
you liked this episode, make sure to subscribe and review
The Big Take wherever you listen to podcasts. It helps
people find the show. Thanks for listening, We'll be back
tomorrow
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
Sarah Strominger and her husband Joe had always gotten health
insurance through Joe's union job, but last year, Joe left
that job to start his own small business, and that
meant the couple had to shop for a new health plan.
Speaker 3 (00:23):
We just started googling and looking up insurance brokers, and
they started flooding our.
Speaker 2 (00:31):
Phone, Sarah says. Once they filled out a form requesting
a health insurance quote, they were inundated by telemarketers calling
with enticing offers promising great cheap health plans, plans those
agents said would cover the couple's expensive medical needs.
Speaker 3 (00:48):
My husband has a small brain tumor on his pituitary glands.
He also is pre diabetic, and I have mental health
insurance coverage I needed, and basically we were promised that
all of that was going.
Speaker 2 (01:04):
To be covered, Sarah says. A telemarketer found them a
plan and convinced them to pay for a full year's
coverage upfront for almost nine thousand dollars, But over time
they realized the plan wasn't what they'd been promised. The
first sign came when they called the pharmacy for Joe's
blood sugar medication, which costs fifteen hundred dollars a month
(01:24):
out of pocket.
Speaker 3 (01:25):
We slowly found out that none of our prescriptions were covered.
We started getting his blood work bills back in the MA,
also his lab four thousand dollars a pop. So slowly
just talking to doctors and realizing that none of this
stuff is being paid.
Speaker 2 (01:44):
The straw Mangers are just one of more than one
hundred thousand US households that have signed up for similar plants,
and Bloomberg zach Mider says it's a growing, largely unregulated
corner of the healthcare industry that's leaving many Americans without
the coverage they need.
Speaker 1 (02:00):
It's a kind of health plan that falls in this
basically legal no man's land where nobody claims to be
able to regulate it in most states, and essentially all
the rules that are set up to kind of govern
our health system in the US don't apply to it.
Speaker 2 (02:20):
I'm Sarah Holder, and this is the big take from
Bloomberg News today. On the show the health plans that
have some Americans feeling dooped, we dig into the telemarketing
group selling them the legal loophole that's let them flourish
and what it could mean for the American health system
if more people turn to them. The story of how
(02:45):
the Stromongers ended up getting sold a health plan that
resembled health insurance but wasn't actually starts with an idea
from one man, Bill Bryan. Who is he and how
did he come up with us?
Speaker 3 (02:58):
Sure?
Speaker 1 (02:58):
So, Bill Brian is actually For most of his career
he was a comedy writer. He wrote for night Court
and Coach and other sitcoms of the eighties and nineties.
And after his successful career as a comedy writer, he
gets into real estate investing and eventually ends up being
fairly wealthy guy and gets really involved in making different
(03:21):
kinds of business investments, and he comes across this idea
to sort of fund this new way of financing healthcare
in America. The idea is that Obamacare is too restrictive, right,
The cheapest plans you can buy are too expensive. They
have these super high deductibles, which means they're not of
much use, especially for people who are just well off
(03:42):
enough that they don't get the subsidies, and who are
self employed or gig workers. They can't get health insurance
through their employer. There's over twenty million people in America
who don't have health insurance, and so he sees this
opportunity if you could provide something that was less expensive
than Obamacare, that was more affordable for people like that,
(04:03):
people like the stro Mangers.
Speaker 2 (04:05):
But what did that look like in practice? What did
he do?
Speaker 1 (04:09):
So typical health insurance in the United States, if you're
buying it as an individual in the marketplace, as opposed
to just getting it from your job, it has to
meet all the standards of the Affordable Care Act, which
means it's got to cover pre existing conditions, and it's
got to meet this checklist of ten items that has
to cover, like hospitalization and emergency room visits, Joe, basic
(04:32):
stuff like that that you think of as like health insurance.
If you are an employer and rather than bring in
an insurance company to provide insurance for your employees, you
just do it yourself. You say, here's a copy of
the plan, here's what we'll cover, and we'll just fund
it out of our pocket. There's no insurance company involved.
Almost all those Obamacare rules I talked about do not apply.
(04:54):
It can be basically anything. And so what these guys
are doing is say we're going to have that arrangement
with our customers. So when we call these people up
on the telephone and sell them a health plan, they're
actually going to become employees of us. And so then
we can offer these health plans that don't meet all
those minimum requirements under the law.
Speaker 2 (05:18):
So essentially these plans are employing people.
Speaker 1 (05:23):
I can see why you're confused, and it is super confusing. Okay.
So the idea is that when a salesman calls you
up on the telephone says, hey, would you like a
health plan and you say yeah, sure, in the process
of that conversation, you are actually becoming an employee of
this random company with a name like Outreach Data Partners LP.
(05:44):
And your work for them is going to be downloading
an app on your phone and using it maybe to
like browse the Internet or something. And by agreeing to
do that work, and also by signing a bunch of
papers and stuff, you are now an employee for legal
purposes of this company, and so they can sell you
this plan that they couldn't sell you unless you were
(06:06):
an employee.
Speaker 2 (06:07):
Wow. So instead of buying health insurance, you are basically
applying for a job at this company without even knowing it,
and that company is giving you insurance, although.
Speaker 1 (06:18):
To be clear, you're paying full freight. Most companies cover
at least some of your health care costs. Here you're
paying the full amount. The idea was to come up
with a way to sell health insurance. It was more affordable, right,
and this was the vehicle to do that. And so
once they come up with this idea, they go to
the government, the Department of Labor, and they say, we
think that these plans comply with the employee benefits laws
(06:40):
for regular employees, and so we think that this is
an insurance and we could be able to sell these
without having to comply with insurance laws.
Speaker 2 (06:48):
So the Labor Department agrees this is a legal way
to offer coverage to people.
Speaker 1 (06:56):
No, the Department of Labor said, it's not. They basic
he said, these people are just buying health insurance. This
isn't an employee relationship. And so that kind of kicked
off a now five year legal battle between Bill Brian
and his allies and the Department of Labor, which still
is going on. It's still not a resolved issue. But
(07:17):
meanwhile Brian started selling these plans in the market. So
even though the kind of underlying legality is still being
sort of fought over. He's actually selling them through telemarketers.
Speaker 2 (07:30):
You mentioned that Bill Brian part of his pitch and
his promise with this new form of insurance was that
it would be cheaper and it would offer new options
for people. How has that worked out in practice.
Speaker 1 (07:41):
There's different ways of looking at cheaper. Certainly in terms
of the ticket price of these plans versus an Obamacare plan,
they're usually less, right, like the dollars you pay per
month to just have the plan is a lot less,
and they're typically no deductibles or low deductibles for a
lot of services. So in that way they're more affordable.
But if you look at the amount of actual medical
(08:02):
coverage that's being funded by those plans, you know, I
found one plan where it was something like twenty five
percent of the monthly cost that the person was paying
was actually going to the cost of the medical care.
So most of the rest of that money was going
to commissions and other kind of fees collected by middlemen
such as the sales agencies. So sales agencies like these
(08:25):
plans because they can add a big commission on top
and they're still cheaper than Obamacare, so they can sell them.
Speaker 2 (08:31):
And is that something that would be allowed under Obamacare.
Speaker 1 (08:33):
No, under Obamacare, you can't spend less than eighty percent
of the customer's premium costs on actual care.
Speaker 2 (08:42):
Zach says. Despite Brian's ongoing legal dispute with the Department
of Labor, which is now playing out in court, and
despite the shortcomings of these plans, agencies have sold a
lot of them.
Speaker 1 (08:54):
We can tell just from Department of Labor statistics that
over one hundred thousand people have been signed up across
the most of them quite recently. And because Bill Brian
has had some success in his court case, even though
it's not resolved, that's inspired a lot of copycats who
are doing a similar kind of thing to what he's doing.
In fact, there's probably more of them now than there
(09:15):
are people signed up for Bill Brian's plans. Labor Department
says we don't regulate them because they're not employees, but
a lot of state insurance regulators who would normally regulate
them are saying those fall under Department of Labor. We
can't regulate them, and so in a lot of states
there's really no one who is regulating.
Speaker 2 (09:34):
Them, so they're caught in this kind of legal gray
area for now. Absolutely we get into the consequences of
that legal gray area and what the government might do
about it. After the break, I've been speaking with Bloomberg
(10:02):
reporter Zach Meider about a new kind of health plan
that offers less coverage than is required of other policies
in the marketplace after creating an employment relationship with its customers.
For now, the Plans live in this legal gray area,
and their business model, which relies on a vast network
of telemarketers, might sound just as complicated, but Zach says,
(10:25):
you can think about it like the car industry.
Speaker 1 (10:28):
There's a car dealer and there's the car.
Speaker 2 (10:30):
In this analogy, Bill Bryan, the guy who came up
with the earliest version of the Plans, is the car maker.
Speaker 1 (10:36):
But he's making a kind of car that, for various reasons,
regulators can't really figure out if anyone is responsible for
regulating it, and so that makes it different from other
cars on the road.
Speaker 2 (10:48):
But there are other people responsible for selling what Brian
and other copycat companies are making, and.
Speaker 1 (10:53):
A lot of the concerns we hear about the way
people are selling it right. Are they saying it's a
Cadillac when it's a less valuable car, that kind of thing.
Speaker 2 (11:02):
And in the case of the stromengers, the car dealer
or telemarketer who sold them their plan was employed by
another company called Quick Health.
Speaker 1 (11:12):
Which is based in Pennsylvania. It's call center. There's people
there work in the phones, calling people all over the
country trying to sell them various health related products.
Speaker 2 (11:22):
A lot of what they were selling were Bill Bryan's
health plans, and according to a former Quick Health employee
who Zach interviewed, the company's salespeople were trained to exaggerate
the plan's benefits, to describe them as comparable to a
Blue Cross or an ETNA plan, but cheaper. The company's
CEO at the time, Arthur Walsh, says the company didn't
(11:44):
misrepresent plans and that it strives to have satisfied customers.
Quick Health's tactics had already gotten it in trouble with regulators.
By twenty twenty four, it had been banned in four
states for using deceptive salescripts, selling with the other a license,
and lying about coverage. Bill Rosh, a Quick Health lawyer,
(12:04):
says the company's regulatory issues were the result of misplaced
blame and mistakes by previous counsel. Sarah and Joe didn't
know about any of this at the time they signed
up for their plan. When they realized the coverage they'd
bought wasn't what they expected, they called Quick Health back.
Speaker 1 (12:22):
And say, hey, this isn't what we signed up for.
We wanted something that would cover all this stuff, and
it doesn't. They eventually get rid of to a different
salesman who says, well, we got to sell you a
slightly more expensive plan that'll cover everything.
Speaker 2 (12:38):
After a series of confusing transactions, the straw Mangers say
they ended up paying even more money and still didn't
get the coverage they needed, and they were unable to
get a refund. Quick Health says it didn't mislead the
straw Mangers, that it frequently gives refunds and that it's
tried to in their case, to avoid getting hit with
more bills. Joe started skipping visits to the tumor doctor.
Speaker 1 (13:02):
So after they kind of realized we're not ever going
to get this money back, they complained to the New
York state insurance regulator, the Department of Financial Services, and
they immediately get an answer that we're just not.
Speaker 2 (13:14):
Going to help you, and what do they do next,
is or anyone else that they can call for any
sort of accountability or recourse. No.
Speaker 1 (13:22):
Essentially, all the rules that are set up to kind
of govern our health system in the US don't apply
to it.
Speaker 2 (13:29):
The stro mangers aren't alone. Hundreds of people have filed
similar complaints with state and federal regulators and the Better
Business Bureau. Many come from customers who say they thought
they were buying a pretty standard health insurance plan at
an affordable cost, who didn't realize they were agreeing to
be an employee of a company they'd never even heard of,
(13:50):
and who came to find out the plans didn't cover
everything the telemarketers promised. Are there people for whom these
plans serve a really important purpose? Are they working for
some people?
Speaker 3 (14:00):
So?
Speaker 1 (14:01):
Bill Brian says that he has thousands of satisfied customers,
and I think for people who really aren't going to
have a lot of medical expenses, you can see why
they'd be attracted to a plan with much lower costs
than like an Obamacare plan. But we buy insurance for
the downside risks, right for something unexpected happening, and it's
hard to tell always like how satisfied people would be
(14:23):
if something actually went wrong.
Speaker 2 (14:24):
What has his reaction been to your reporting that shows
that some of these salesmen are perhaps misrepresenting what they're selling.
Speaker 1 (14:33):
So Brian blames the Labor Department for all this because
he says, look, this ought to be legal. The Labor
Department is fighting us on it, and that means that
we're stuck in this legal gray area where the only
people who are willing to sell it are some of
these telemarketers who might be coloring outside the lines here
and there. And he's trying to cut down on that
(14:55):
and catch the telemarketers that are no good and tell
them they can't sell his product anymore. But he's saying,
if the Labor Department would just agree that these are legal,
then we wouldn't have all these problems. He's also saying
that he's going to try to bring sales in house
and have his own distribution for us so that he
doesn't have to rely on these third party marketers that
(15:15):
might be doing things without his knowledge.
Speaker 2 (15:18):
And what is the status of that Labor Department battle?
How my Trump's Labor department look at this case.
Speaker 1 (15:24):
You may recall that Trump last year during the campaign,
was talking about how he had concepts of a plan
to replace or improve on Obamacare. And we haven't seen
a lot from the new administration about exactly what they
would like to do. But you know, here's a case
where I think Brian and his allies could make an
argument that this would be a sort of back doorway
(15:48):
of deregulating the healthcare industry. And that's been kind of
the dream during the first Trump administration. So you could
imagine a scenario where maybe the Trump administration decides we're
not going to fight this one. We're going to agree
to allow these plans to be sold. Now, we asked
the Department of Labor that you know, there's a new
secretary has just been in there a little while, and
(16:09):
we haven't gotten an answer back as to how committed
they are to continuing this fight or rethinking it.
Speaker 2 (16:15):
If there were to be an explosion in these kinds
of plans in the coming years, how might that impact
other participants in the health insurance marketplace.
Speaker 1 (16:23):
So some of the opponents of this kind of idea,
people like incumbent health insurers and you know, the leukemia
and Lymphoma Society and other kind of organizations like that
are very worried about plans like this becoming more common.
And the thinking is as follows. If these kind of
less expensive plans that don't cover as much were to
peel a lot of really healthy people out of the
(16:46):
Obamacare market, then what would happen is, right now, healthy
people kind of subsidize sick people in the Obamacare marketplace, right,
and so if you take a lot of those healthy
people out, the costs of Obamacare are going to rise,
and that could eventually cause what some people call an
insurance death spiral, where as they become more and more unaffordable,
(17:08):
more people leave, which then eventually makes the whole market
not function anymore.
Speaker 2 (17:18):
This is the big take from Bloomberg News. I'm Sarah Holder.
This episode was produced by Julia Press. It was edited
by Aaron Edwards and Robert Friedman, additional reporting by Zeke Fox.
It was fact checked by Rachel Lewis Chrisky and mixed
and sound designed by Alex Sugia. Our senior producer is
Naomi Shaven. Our senior editor is Elizabeth Ponso. Our deputy
(17:39):
executive producer is Julia Weaver. Our executive producer is Nicole
Beamster Boor. Sage Bauman is Bloomberg's head of podcasts. If
you liked this episode, make sure to subscribe and review
The Big Take wherever you listen to podcasts. It helps
people find the show. Thanks for listening, We'll be back
tomorrow
Hosts And Creators
Sarah Holder
Saleha Mohsin
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