1 00:00:02,720 --> 00:00:08,560 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:10,039 --> 00:00:13,320 Speaker 2: Sarah Strominger and her husband Joe had always gotten health 3 00:00:13,320 --> 00:00:17,520 Speaker 2: insurance through Joe's union job, but last year, Joe left 4 00:00:17,560 --> 00:00:20,720 Speaker 2: that job to start his own small business, and that 5 00:00:20,880 --> 00:00:23,479 Speaker 2: meant the couple had to shop for a new health plan. 6 00:00:23,960 --> 00:00:29,480 Speaker 3: We just started googling and looking up insurance brokers, and 7 00:00:30,200 --> 00:00:31,840 Speaker 3: they started flooding our. 8 00:00:31,720 --> 00:00:35,279 Speaker 2: Phone, Sarah says. Once they filled out a form requesting 9 00:00:35,280 --> 00:00:39,080 Speaker 2: a health insurance quote, they were inundated by telemarketers calling 10 00:00:39,120 --> 00:00:44,120 Speaker 2: with enticing offers promising great cheap health plans, plans those 11 00:00:44,200 --> 00:00:47,880 Speaker 2: agents said would cover the couple's expensive medical needs. 12 00:00:48,560 --> 00:00:53,400 Speaker 3: My husband has a small brain tumor on his pituitary glands. 13 00:00:54,040 --> 00:00:58,840 Speaker 3: He also is pre diabetic, and I have mental health 14 00:00:58,840 --> 00:01:03,000 Speaker 3: insurance coverage I needed, and basically we were promised that 15 00:01:03,280 --> 00:01:04,720 Speaker 3: all of that was going. 16 00:01:04,520 --> 00:01:07,640 Speaker 2: To be covered, Sarah says. A telemarketer found them a 17 00:01:07,640 --> 00:01:10,240 Speaker 2: plan and convinced them to pay for a full year's 18 00:01:10,280 --> 00:01:14,720 Speaker 2: coverage upfront for almost nine thousand dollars, But over time 19 00:01:15,040 --> 00:01:18,600 Speaker 2: they realized the plan wasn't what they'd been promised. The 20 00:01:18,640 --> 00:01:21,000 Speaker 2: first sign came when they called the pharmacy for Joe's 21 00:01:21,000 --> 00:01:24,720 Speaker 2: blood sugar medication, which costs fifteen hundred dollars a month 22 00:01:24,840 --> 00:01:25,560 Speaker 2: out of pocket. 23 00:01:25,800 --> 00:01:30,280 Speaker 3: We slowly found out that none of our prescriptions were covered. 24 00:01:30,920 --> 00:01:33,880 Speaker 3: We started getting his blood work bills back in the MA, 25 00:01:33,880 --> 00:01:38,840 Speaker 3: also his lab four thousand dollars a pop. So slowly 26 00:01:39,000 --> 00:01:42,880 Speaker 3: just talking to doctors and realizing that none of this 27 00:01:42,920 --> 00:01:44,000 Speaker 3: stuff is being paid. 28 00:01:44,640 --> 00:01:46,800 Speaker 2: The straw Mangers are just one of more than one 29 00:01:46,880 --> 00:01:50,440 Speaker 2: hundred thousand US households that have signed up for similar plants, 30 00:01:50,960 --> 00:01:55,120 Speaker 2: and Bloomberg zach Mider says it's a growing, largely unregulated 31 00:01:55,160 --> 00:01:59,160 Speaker 2: corner of the healthcare industry that's leaving many Americans without 32 00:01:59,200 --> 00:01:59,960 Speaker 2: the coverage they need. 33 00:02:00,640 --> 00:02:04,400 Speaker 1: It's a kind of health plan that falls in this 34 00:02:04,720 --> 00:02:09,720 Speaker 1: basically legal no man's land where nobody claims to be 35 00:02:09,720 --> 00:02:13,799 Speaker 1: able to regulate it in most states, and essentially all 36 00:02:13,800 --> 00:02:15,600 Speaker 1: the rules that are set up to kind of govern 37 00:02:15,680 --> 00:02:17,760 Speaker 1: our health system in the US don't apply to it. 38 00:02:20,000 --> 00:02:22,560 Speaker 2: I'm Sarah Holder, and this is the big take from 39 00:02:22,600 --> 00:02:26,080 Speaker 2: Bloomberg News today. On the show the health plans that 40 00:02:26,200 --> 00:02:30,160 Speaker 2: have some Americans feeling dooped, we dig into the telemarketing 41 00:02:30,200 --> 00:02:33,520 Speaker 2: group selling them the legal loophole that's let them flourish 42 00:02:33,800 --> 00:02:36,080 Speaker 2: and what it could mean for the American health system 43 00:02:36,240 --> 00:02:45,720 Speaker 2: if more people turn to them. The story of how 44 00:02:45,800 --> 00:02:48,560 Speaker 2: the Stromongers ended up getting sold a health plan that 45 00:02:48,680 --> 00:02:52,800 Speaker 2: resembled health insurance but wasn't actually starts with an idea 46 00:02:52,919 --> 00:02:57,120 Speaker 2: from one man, Bill Bryan. Who is he and how 47 00:02:57,120 --> 00:02:58,079 Speaker 2: did he come up with us? 48 00:02:58,360 --> 00:02:58,640 Speaker 3: Sure? 49 00:02:58,800 --> 00:03:02,079 Speaker 1: So, Bill Brian is actually For most of his career 50 00:03:02,120 --> 00:03:05,800 Speaker 1: he was a comedy writer. He wrote for night Court 51 00:03:06,000 --> 00:03:10,040 Speaker 1: and Coach and other sitcoms of the eighties and nineties. 52 00:03:10,240 --> 00:03:13,360 Speaker 1: And after his successful career as a comedy writer, he 53 00:03:14,000 --> 00:03:16,760 Speaker 1: gets into real estate investing and eventually ends up being 54 00:03:17,000 --> 00:03:21,120 Speaker 1: fairly wealthy guy and gets really involved in making different 55 00:03:21,200 --> 00:03:25,040 Speaker 1: kinds of business investments, and he comes across this idea 56 00:03:25,160 --> 00:03:28,960 Speaker 1: to sort of fund this new way of financing healthcare 57 00:03:29,000 --> 00:03:33,880 Speaker 1: in America. The idea is that Obamacare is too restrictive, right, 58 00:03:34,000 --> 00:03:36,280 Speaker 1: The cheapest plans you can buy are too expensive. They 59 00:03:36,320 --> 00:03:38,480 Speaker 1: have these super high deductibles, which means they're not of 60 00:03:38,560 --> 00:03:41,960 Speaker 1: much use, especially for people who are just well off 61 00:03:42,040 --> 00:03:44,960 Speaker 1: enough that they don't get the subsidies, and who are 62 00:03:45,040 --> 00:03:47,680 Speaker 1: self employed or gig workers. They can't get health insurance 63 00:03:47,720 --> 00:03:51,960 Speaker 1: through their employer. There's over twenty million people in America 64 00:03:51,960 --> 00:03:56,000 Speaker 1: who don't have health insurance, and so he sees this 65 00:03:56,040 --> 00:03:59,600 Speaker 1: opportunity if you could provide something that was less expensive 66 00:03:59,680 --> 00:04:03,120 Speaker 1: than Obamacare, that was more affordable for people like that, 67 00:04:03,680 --> 00:04:04,880 Speaker 1: people like the stro Mangers. 68 00:04:05,120 --> 00:04:07,760 Speaker 2: But what did that look like in practice? What did 69 00:04:07,760 --> 00:04:08,000 Speaker 2: he do? 70 00:04:09,560 --> 00:04:12,800 Speaker 1: So typical health insurance in the United States, if you're 71 00:04:12,800 --> 00:04:15,520 Speaker 1: buying it as an individual in the marketplace, as opposed 72 00:04:15,560 --> 00:04:19,000 Speaker 1: to just getting it from your job, it has to 73 00:04:19,040 --> 00:04:21,680 Speaker 1: meet all the standards of the Affordable Care Act, which 74 00:04:21,680 --> 00:04:24,720 Speaker 1: means it's got to cover pre existing conditions, and it's 75 00:04:24,760 --> 00:04:27,440 Speaker 1: got to meet this checklist of ten items that has 76 00:04:27,480 --> 00:04:32,159 Speaker 1: to cover, like hospitalization and emergency room visits, Joe, basic 77 00:04:32,200 --> 00:04:34,520 Speaker 1: stuff like that that you think of as like health insurance. 78 00:04:35,279 --> 00:04:38,880 Speaker 1: If you are an employer and rather than bring in 79 00:04:38,920 --> 00:04:41,839 Speaker 1: an insurance company to provide insurance for your employees, you 80 00:04:41,920 --> 00:04:44,719 Speaker 1: just do it yourself. You say, here's a copy of 81 00:04:44,760 --> 00:04:47,440 Speaker 1: the plan, here's what we'll cover, and we'll just fund 82 00:04:47,440 --> 00:04:50,239 Speaker 1: it out of our pocket. There's no insurance company involved. 83 00:04:50,720 --> 00:04:53,679 Speaker 1: Almost all those Obamacare rules I talked about do not apply. 84 00:04:54,600 --> 00:04:59,080 Speaker 1: It can be basically anything. And so what these guys 85 00:04:59,120 --> 00:05:02,160 Speaker 1: are doing is say we're going to have that arrangement 86 00:05:02,240 --> 00:05:05,520 Speaker 1: with our customers. So when we call these people up 87 00:05:05,560 --> 00:05:07,640 Speaker 1: on the telephone and sell them a health plan, they're 88 00:05:07,640 --> 00:05:10,560 Speaker 1: actually going to become employees of us. And so then 89 00:05:10,720 --> 00:05:13,839 Speaker 1: we can offer these health plans that don't meet all 90 00:05:13,880 --> 00:05:16,160 Speaker 1: those minimum requirements under the law. 91 00:05:18,240 --> 00:05:22,960 Speaker 2: So essentially these plans are employing people. 92 00:05:23,240 --> 00:05:26,719 Speaker 1: I can see why you're confused, and it is super confusing. Okay. 93 00:05:26,920 --> 00:05:29,400 Speaker 1: So the idea is that when a salesman calls you 94 00:05:29,480 --> 00:05:31,599 Speaker 1: up on the telephone says, hey, would you like a 95 00:05:31,640 --> 00:05:35,200 Speaker 1: health plan and you say yeah, sure, in the process 96 00:05:35,240 --> 00:05:38,760 Speaker 1: of that conversation, you are actually becoming an employee of 97 00:05:39,400 --> 00:05:43,400 Speaker 1: this random company with a name like Outreach Data Partners LP. 98 00:05:44,480 --> 00:05:48,120 Speaker 1: And your work for them is going to be downloading 99 00:05:48,120 --> 00:05:51,320 Speaker 1: an app on your phone and using it maybe to 100 00:05:51,320 --> 00:05:54,560 Speaker 1: like browse the Internet or something. And by agreeing to 101 00:05:54,600 --> 00:05:57,080 Speaker 1: do that work, and also by signing a bunch of 102 00:05:57,120 --> 00:06:00,719 Speaker 1: papers and stuff, you are now an employee for legal 103 00:06:00,760 --> 00:06:03,200 Speaker 1: purposes of this company, and so they can sell you 104 00:06:03,279 --> 00:06:06,760 Speaker 1: this plan that they couldn't sell you unless you were 105 00:06:06,760 --> 00:06:07,400 Speaker 1: an employee. 106 00:06:07,440 --> 00:06:11,240 Speaker 2: Wow. So instead of buying health insurance, you are basically 107 00:06:11,480 --> 00:06:14,320 Speaker 2: applying for a job at this company without even knowing it, 108 00:06:14,760 --> 00:06:18,560 Speaker 2: and that company is giving you insurance, although. 109 00:06:18,200 --> 00:06:20,839 Speaker 1: To be clear, you're paying full freight. Most companies cover 110 00:06:20,880 --> 00:06:22,800 Speaker 1: at least some of your health care costs. Here you're 111 00:06:22,800 --> 00:06:24,560 Speaker 1: paying the full amount. The idea was to come up 112 00:06:24,600 --> 00:06:27,599 Speaker 1: with a way to sell health insurance. It was more affordable, right, 113 00:06:27,640 --> 00:06:30,120 Speaker 1: and this was the vehicle to do that. And so 114 00:06:30,839 --> 00:06:33,520 Speaker 1: once they come up with this idea, they go to 115 00:06:33,560 --> 00:06:35,760 Speaker 1: the government, the Department of Labor, and they say, we 116 00:06:35,839 --> 00:06:40,240 Speaker 1: think that these plans comply with the employee benefits laws 117 00:06:40,279 --> 00:06:44,120 Speaker 1: for regular employees, and so we think that this is 118 00:06:44,120 --> 00:06:46,120 Speaker 1: an insurance and we could be able to sell these 119 00:06:46,160 --> 00:06:48,000 Speaker 1: without having to comply with insurance laws. 120 00:06:48,480 --> 00:06:53,679 Speaker 2: So the Labor Department agrees this is a legal way 121 00:06:53,800 --> 00:06:56,400 Speaker 2: to offer coverage to people. 122 00:06:56,640 --> 00:06:59,960 Speaker 1: No, the Department of Labor said, it's not. They basic 123 00:07:00,160 --> 00:07:02,680 Speaker 1: he said, these people are just buying health insurance. This 124 00:07:02,720 --> 00:07:05,920 Speaker 1: isn't an employee relationship. And so that kind of kicked 125 00:07:05,960 --> 00:07:10,280 Speaker 1: off a now five year legal battle between Bill Brian 126 00:07:10,360 --> 00:07:14,080 Speaker 1: and his allies and the Department of Labor, which still 127 00:07:14,160 --> 00:07:17,040 Speaker 1: is going on. It's still not a resolved issue. But 128 00:07:17,200 --> 00:07:20,720 Speaker 1: meanwhile Brian started selling these plans in the market. So 129 00:07:20,920 --> 00:07:24,600 Speaker 1: even though the kind of underlying legality is still being 130 00:07:24,680 --> 00:07:29,720 Speaker 1: sort of fought over. He's actually selling them through telemarketers. 131 00:07:30,920 --> 00:07:33,120 Speaker 2: You mentioned that Bill Brian part of his pitch and 132 00:07:33,160 --> 00:07:36,480 Speaker 2: his promise with this new form of insurance was that 133 00:07:36,480 --> 00:07:38,679 Speaker 2: it would be cheaper and it would offer new options 134 00:07:38,680 --> 00:07:41,040 Speaker 2: for people. How has that worked out in practice. 135 00:07:41,280 --> 00:07:43,720 Speaker 1: There's different ways of looking at cheaper. Certainly in terms 136 00:07:43,760 --> 00:07:48,120 Speaker 1: of the ticket price of these plans versus an Obamacare plan, 137 00:07:48,600 --> 00:07:51,840 Speaker 1: they're usually less, right, like the dollars you pay per 138 00:07:51,880 --> 00:07:54,000 Speaker 1: month to just have the plan is a lot less, 139 00:07:54,400 --> 00:07:57,480 Speaker 1: and they're typically no deductibles or low deductibles for a 140 00:07:57,480 --> 00:08:00,000 Speaker 1: lot of services. So in that way they're more affordable. 141 00:08:00,480 --> 00:08:02,720 Speaker 1: But if you look at the amount of actual medical 142 00:08:02,760 --> 00:08:06,840 Speaker 1: coverage that's being funded by those plans, you know, I 143 00:08:06,880 --> 00:08:09,880 Speaker 1: found one plan where it was something like twenty five 144 00:08:09,960 --> 00:08:13,960 Speaker 1: percent of the monthly cost that the person was paying 145 00:08:14,000 --> 00:08:16,120 Speaker 1: was actually going to the cost of the medical care. 146 00:08:16,240 --> 00:08:18,040 Speaker 1: So most of the rest of that money was going 147 00:08:18,080 --> 00:08:21,680 Speaker 1: to commissions and other kind of fees collected by middlemen 148 00:08:22,000 --> 00:08:25,440 Speaker 1: such as the sales agencies. So sales agencies like these 149 00:08:25,480 --> 00:08:28,200 Speaker 1: plans because they can add a big commission on top 150 00:08:28,520 --> 00:08:31,120 Speaker 1: and they're still cheaper than Obamacare, so they can sell them. 151 00:08:31,160 --> 00:08:33,720 Speaker 2: And is that something that would be allowed under Obamacare. 152 00:08:33,960 --> 00:08:37,880 Speaker 1: No, under Obamacare, you can't spend less than eighty percent 153 00:08:38,520 --> 00:08:41,880 Speaker 1: of the customer's premium costs on actual care. 154 00:08:42,400 --> 00:08:46,240 Speaker 2: Zach says. Despite Brian's ongoing legal dispute with the Department 155 00:08:46,280 --> 00:08:49,360 Speaker 2: of Labor, which is now playing out in court, and 156 00:08:49,640 --> 00:08:53,720 Speaker 2: despite the shortcomings of these plans, agencies have sold a 157 00:08:53,760 --> 00:08:54,400 Speaker 2: lot of them. 158 00:08:54,880 --> 00:08:57,720 Speaker 1: We can tell just from Department of Labor statistics that 159 00:08:57,800 --> 00:08:59,760 Speaker 1: over one hundred thousand people have been signed up across 160 00:08:59,760 --> 00:09:04,199 Speaker 1: the most of them quite recently. And because Bill Brian 161 00:09:04,240 --> 00:09:07,079 Speaker 1: has had some success in his court case, even though 162 00:09:07,080 --> 00:09:10,800 Speaker 1: it's not resolved, that's inspired a lot of copycats who 163 00:09:10,800 --> 00:09:13,400 Speaker 1: are doing a similar kind of thing to what he's doing. 164 00:09:13,960 --> 00:09:15,880 Speaker 1: In fact, there's probably more of them now than there 165 00:09:15,920 --> 00:09:19,600 Speaker 1: are people signed up for Bill Brian's plans. Labor Department 166 00:09:19,640 --> 00:09:22,600 Speaker 1: says we don't regulate them because they're not employees, but 167 00:09:22,720 --> 00:09:26,080 Speaker 1: a lot of state insurance regulators who would normally regulate 168 00:09:26,120 --> 00:09:28,760 Speaker 1: them are saying those fall under Department of Labor. We 169 00:09:28,760 --> 00:09:31,560 Speaker 1: can't regulate them, and so in a lot of states 170 00:09:31,640 --> 00:09:34,520 Speaker 1: there's really no one who is regulating. 171 00:09:34,080 --> 00:09:35,960 Speaker 2: Them, so they're caught in this kind of legal gray 172 00:09:36,000 --> 00:09:42,200 Speaker 2: area for now. Absolutely we get into the consequences of 173 00:09:42,200 --> 00:09:45,200 Speaker 2: that legal gray area and what the government might do 174 00:09:45,280 --> 00:10:02,160 Speaker 2: about it. After the break, I've been speaking with Bloomberg 175 00:10:02,200 --> 00:10:05,120 Speaker 2: reporter Zach Meider about a new kind of health plan 176 00:10:05,320 --> 00:10:08,559 Speaker 2: that offers less coverage than is required of other policies 177 00:10:08,559 --> 00:10:13,360 Speaker 2: in the marketplace after creating an employment relationship with its customers. 178 00:10:14,040 --> 00:10:17,280 Speaker 2: For now, the Plans live in this legal gray area, 179 00:10:17,800 --> 00:10:20,800 Speaker 2: and their business model, which relies on a vast network 180 00:10:20,840 --> 00:10:25,400 Speaker 2: of telemarketers, might sound just as complicated, but Zach says, 181 00:10:25,600 --> 00:10:27,920 Speaker 2: you can think about it like the car industry. 182 00:10:28,280 --> 00:10:29,880 Speaker 1: There's a car dealer and there's the car. 183 00:10:30,160 --> 00:10:32,960 Speaker 2: In this analogy, Bill Bryan, the guy who came up 184 00:10:32,960 --> 00:10:36,080 Speaker 2: with the earliest version of the Plans, is the car maker. 185 00:10:36,520 --> 00:10:39,440 Speaker 1: But he's making a kind of car that, for various reasons, 186 00:10:39,920 --> 00:10:44,040 Speaker 1: regulators can't really figure out if anyone is responsible for 187 00:10:44,120 --> 00:10:46,920 Speaker 1: regulating it, and so that makes it different from other 188 00:10:46,960 --> 00:10:47,720 Speaker 1: cars on the road. 189 00:10:48,000 --> 00:10:51,080 Speaker 2: But there are other people responsible for selling what Brian 190 00:10:51,280 --> 00:10:53,920 Speaker 2: and other copycat companies are making, and. 191 00:10:53,880 --> 00:10:55,680 Speaker 1: A lot of the concerns we hear about the way 192 00:10:55,720 --> 00:10:58,760 Speaker 1: people are selling it right. Are they saying it's a 193 00:10:58,760 --> 00:11:02,079 Speaker 1: Cadillac when it's a less valuable car, that kind of thing. 194 00:11:02,679 --> 00:11:05,400 Speaker 2: And in the case of the stromengers, the car dealer 195 00:11:05,679 --> 00:11:09,400 Speaker 2: or telemarketer who sold them their plan was employed by 196 00:11:09,440 --> 00:11:12,359 Speaker 2: another company called Quick Health. 197 00:11:12,520 --> 00:11:16,960 Speaker 1: Which is based in Pennsylvania. It's call center. There's people 198 00:11:16,960 --> 00:11:19,160 Speaker 1: there work in the phones, calling people all over the 199 00:11:19,200 --> 00:11:22,600 Speaker 1: country trying to sell them various health related products. 200 00:11:22,920 --> 00:11:25,559 Speaker 2: A lot of what they were selling were Bill Bryan's 201 00:11:25,679 --> 00:11:29,200 Speaker 2: health plans, and according to a former Quick Health employee 202 00:11:29,200 --> 00:11:33,800 Speaker 2: who Zach interviewed, the company's salespeople were trained to exaggerate 203 00:11:33,840 --> 00:11:37,360 Speaker 2: the plan's benefits, to describe them as comparable to a 204 00:11:37,400 --> 00:11:41,120 Speaker 2: Blue Cross or an ETNA plan, but cheaper. The company's 205 00:11:41,160 --> 00:11:44,559 Speaker 2: CEO at the time, Arthur Walsh, says the company didn't 206 00:11:44,600 --> 00:11:48,199 Speaker 2: misrepresent plans and that it strives to have satisfied customers. 207 00:11:50,040 --> 00:11:53,679 Speaker 2: Quick Health's tactics had already gotten it in trouble with regulators. 208 00:11:54,360 --> 00:11:56,760 Speaker 2: By twenty twenty four, it had been banned in four 209 00:11:56,840 --> 00:12:00,720 Speaker 2: states for using deceptive salescripts, selling with the other a license, 210 00:12:00,880 --> 00:12:04,640 Speaker 2: and lying about coverage. Bill Rosh, a Quick Health lawyer, 211 00:12:04,800 --> 00:12:08,240 Speaker 2: says the company's regulatory issues were the result of misplaced 212 00:12:08,240 --> 00:12:13,040 Speaker 2: blame and mistakes by previous counsel. Sarah and Joe didn't 213 00:12:13,080 --> 00:12:15,280 Speaker 2: know about any of this at the time they signed 214 00:12:15,360 --> 00:12:18,360 Speaker 2: up for their plan. When they realized the coverage they'd 215 00:12:18,360 --> 00:12:22,359 Speaker 2: bought wasn't what they expected, they called Quick Health back. 216 00:12:22,360 --> 00:12:24,920 Speaker 1: And say, hey, this isn't what we signed up for. 217 00:12:25,120 --> 00:12:27,720 Speaker 1: We wanted something that would cover all this stuff, and 218 00:12:27,920 --> 00:12:31,319 Speaker 1: it doesn't. They eventually get rid of to a different 219 00:12:31,320 --> 00:12:34,360 Speaker 1: salesman who says, well, we got to sell you a 220 00:12:34,360 --> 00:12:36,920 Speaker 1: slightly more expensive plan that'll cover everything. 221 00:12:38,120 --> 00:12:41,680 Speaker 2: After a series of confusing transactions, the straw Mangers say 222 00:12:41,679 --> 00:12:44,600 Speaker 2: they ended up paying even more money and still didn't 223 00:12:44,640 --> 00:12:47,240 Speaker 2: get the coverage they needed, and they were unable to 224 00:12:47,240 --> 00:12:50,400 Speaker 2: get a refund. Quick Health says it didn't mislead the 225 00:12:50,400 --> 00:12:53,240 Speaker 2: straw Mangers, that it frequently gives refunds and that it's 226 00:12:53,280 --> 00:12:57,000 Speaker 2: tried to in their case, to avoid getting hit with 227 00:12:57,080 --> 00:13:00,920 Speaker 2: more bills. Joe started skipping visits to the tumor doctor. 228 00:13:02,280 --> 00:13:05,000 Speaker 1: So after they kind of realized we're not ever going 229 00:13:05,040 --> 00:13:08,200 Speaker 1: to get this money back, they complained to the New 230 00:13:08,280 --> 00:13:12,280 Speaker 1: York state insurance regulator, the Department of Financial Services, and 231 00:13:12,720 --> 00:13:14,679 Speaker 1: they immediately get an answer that we're just not. 232 00:13:14,640 --> 00:13:16,720 Speaker 2: Going to help you, and what do they do next, 233 00:13:16,760 --> 00:13:19,400 Speaker 2: is or anyone else that they can call for any 234 00:13:19,400 --> 00:13:22,079 Speaker 2: sort of accountability or recourse. No. 235 00:13:22,800 --> 00:13:25,199 Speaker 1: Essentially, all the rules that are set up to kind 236 00:13:25,200 --> 00:13:27,400 Speaker 1: of govern our health system in the US don't apply 237 00:13:27,480 --> 00:13:27,720 Speaker 1: to it. 238 00:13:29,920 --> 00:13:33,400 Speaker 2: The stro mangers aren't alone. Hundreds of people have filed 239 00:13:33,440 --> 00:13:36,680 Speaker 2: similar complaints with state and federal regulators and the Better 240 00:13:36,720 --> 00:13:40,360 Speaker 2: Business Bureau. Many come from customers who say they thought 241 00:13:40,440 --> 00:13:43,240 Speaker 2: they were buying a pretty standard health insurance plan at 242 00:13:43,280 --> 00:13:46,840 Speaker 2: an affordable cost, who didn't realize they were agreeing to 243 00:13:46,880 --> 00:13:49,840 Speaker 2: be an employee of a company they'd never even heard of, 244 00:13:50,400 --> 00:13:52,760 Speaker 2: and who came to find out the plans didn't cover 245 00:13:52,880 --> 00:13:56,960 Speaker 2: everything the telemarketers promised. Are there people for whom these 246 00:13:57,000 --> 00:14:00,160 Speaker 2: plans serve a really important purpose? Are they working for 247 00:14:00,200 --> 00:14:00,640 Speaker 2: some people? 248 00:14:00,920 --> 00:14:01,000 Speaker 3: So? 249 00:14:01,200 --> 00:14:04,079 Speaker 1: Bill Brian says that he has thousands of satisfied customers, 250 00:14:04,360 --> 00:14:07,520 Speaker 1: and I think for people who really aren't going to 251 00:14:07,559 --> 00:14:10,040 Speaker 1: have a lot of medical expenses, you can see why 252 00:14:10,080 --> 00:14:12,280 Speaker 1: they'd be attracted to a plan with much lower costs 253 00:14:12,320 --> 00:14:16,280 Speaker 1: than like an Obamacare plan. But we buy insurance for 254 00:14:16,720 --> 00:14:20,640 Speaker 1: the downside risks, right for something unexpected happening, and it's 255 00:14:20,800 --> 00:14:23,240 Speaker 1: hard to tell always like how satisfied people would be 256 00:14:23,280 --> 00:14:24,400 Speaker 1: if something actually went wrong. 257 00:14:24,720 --> 00:14:28,920 Speaker 2: What has his reaction been to your reporting that shows 258 00:14:28,920 --> 00:14:33,280 Speaker 2: that some of these salesmen are perhaps misrepresenting what they're selling. 259 00:14:33,400 --> 00:14:36,360 Speaker 1: So Brian blames the Labor Department for all this because 260 00:14:36,360 --> 00:14:38,920 Speaker 1: he says, look, this ought to be legal. The Labor 261 00:14:38,960 --> 00:14:42,000 Speaker 1: Department is fighting us on it, and that means that 262 00:14:42,040 --> 00:14:44,560 Speaker 1: we're stuck in this legal gray area where the only 263 00:14:44,560 --> 00:14:47,320 Speaker 1: people who are willing to sell it are some of 264 00:14:47,360 --> 00:14:52,400 Speaker 1: these telemarketers who might be coloring outside the lines here 265 00:14:52,440 --> 00:14:55,320 Speaker 1: and there. And he's trying to cut down on that 266 00:14:55,440 --> 00:14:58,560 Speaker 1: and catch the telemarketers that are no good and tell 267 00:14:58,600 --> 00:15:01,800 Speaker 1: them they can't sell his product anymore. But he's saying, 268 00:15:01,840 --> 00:15:05,280 Speaker 1: if the Labor Department would just agree that these are legal, 269 00:15:05,320 --> 00:15:07,880 Speaker 1: then we wouldn't have all these problems. He's also saying 270 00:15:07,880 --> 00:15:10,680 Speaker 1: that he's going to try to bring sales in house 271 00:15:10,760 --> 00:15:12,920 Speaker 1: and have his own distribution for us so that he 272 00:15:12,960 --> 00:15:15,760 Speaker 1: doesn't have to rely on these third party marketers that 273 00:15:15,880 --> 00:15:18,280 Speaker 1: might be doing things without his knowledge. 274 00:15:18,440 --> 00:15:21,400 Speaker 2: And what is the status of that Labor Department battle? 275 00:15:21,640 --> 00:15:24,320 Speaker 2: How my Trump's Labor department look at this case. 276 00:15:24,880 --> 00:15:27,480 Speaker 1: You may recall that Trump last year during the campaign, 277 00:15:27,560 --> 00:15:30,280 Speaker 1: was talking about how he had concepts of a plan 278 00:15:30,920 --> 00:15:35,080 Speaker 1: to replace or improve on Obamacare. And we haven't seen 279 00:15:35,080 --> 00:15:37,360 Speaker 1: a lot from the new administration about exactly what they 280 00:15:37,640 --> 00:15:41,080 Speaker 1: would like to do. But you know, here's a case 281 00:15:41,120 --> 00:15:44,000 Speaker 1: where I think Brian and his allies could make an 282 00:15:44,080 --> 00:15:47,880 Speaker 1: argument that this would be a sort of back doorway 283 00:15:48,160 --> 00:15:52,880 Speaker 1: of deregulating the healthcare industry. And that's been kind of 284 00:15:52,880 --> 00:15:55,840 Speaker 1: the dream during the first Trump administration. So you could 285 00:15:55,880 --> 00:15:59,320 Speaker 1: imagine a scenario where maybe the Trump administration decides we're 286 00:15:59,360 --> 00:16:01,400 Speaker 1: not going to fight this one. We're going to agree 287 00:16:01,600 --> 00:16:03,880 Speaker 1: to allow these plans to be sold. Now, we asked 288 00:16:03,960 --> 00:16:06,480 Speaker 1: the Department of Labor that you know, there's a new 289 00:16:06,520 --> 00:16:09,120 Speaker 1: secretary has just been in there a little while, and 290 00:16:09,200 --> 00:16:12,320 Speaker 1: we haven't gotten an answer back as to how committed 291 00:16:12,320 --> 00:16:14,920 Speaker 1: they are to continuing this fight or rethinking it. 292 00:16:15,400 --> 00:16:17,640 Speaker 2: If there were to be an explosion in these kinds 293 00:16:17,640 --> 00:16:19,960 Speaker 2: of plans in the coming years, how might that impact 294 00:16:20,040 --> 00:16:23,080 Speaker 2: other participants in the health insurance marketplace. 295 00:16:23,840 --> 00:16:26,080 Speaker 1: So some of the opponents of this kind of idea, 296 00:16:26,560 --> 00:16:30,080 Speaker 1: people like incumbent health insurers and you know, the leukemia 297 00:16:30,040 --> 00:16:33,280 Speaker 1: and Lymphoma Society and other kind of organizations like that 298 00:16:33,640 --> 00:16:36,360 Speaker 1: are very worried about plans like this becoming more common. 299 00:16:36,800 --> 00:16:39,760 Speaker 1: And the thinking is as follows. If these kind of 300 00:16:39,800 --> 00:16:43,200 Speaker 1: less expensive plans that don't cover as much were to 301 00:16:43,360 --> 00:16:46,280 Speaker 1: peel a lot of really healthy people out of the 302 00:16:46,320 --> 00:16:51,240 Speaker 1: Obamacare market, then what would happen is, right now, healthy 303 00:16:51,280 --> 00:16:55,600 Speaker 1: people kind of subsidize sick people in the Obamacare marketplace, right, 304 00:16:56,080 --> 00:16:57,800 Speaker 1: and so if you take a lot of those healthy 305 00:16:57,840 --> 00:17:01,040 Speaker 1: people out, the costs of Obamacare are going to rise, 306 00:17:01,400 --> 00:17:04,800 Speaker 1: and that could eventually cause what some people call an 307 00:17:04,840 --> 00:17:08,680 Speaker 1: insurance death spiral, where as they become more and more unaffordable, 308 00:17:08,720 --> 00:17:12,119 Speaker 1: more people leave, which then eventually makes the whole market 309 00:17:12,359 --> 00:17:13,400 Speaker 1: not function anymore. 310 00:17:18,160 --> 00:17:21,119 Speaker 2: This is the big take from Bloomberg News. I'm Sarah Holder. 311 00:17:21,359 --> 00:17:24,720 Speaker 2: This episode was produced by Julia Press. It was edited 312 00:17:24,720 --> 00:17:28,639 Speaker 2: by Aaron Edwards and Robert Friedman, additional reporting by Zeke Fox. 313 00:17:29,240 --> 00:17:31,800 Speaker 2: It was fact checked by Rachel Lewis Chrisky and mixed 314 00:17:31,800 --> 00:17:35,159 Speaker 2: and sound designed by Alex Sugia. Our senior producer is 315 00:17:35,240 --> 00:17:39,240 Speaker 2: Naomi Shaven. Our senior editor is Elizabeth Ponso. Our deputy 316 00:17:39,320 --> 00:17:43,159 Speaker 2: executive producer is Julia Weaver. Our executive producer is Nicole 317 00:17:43,200 --> 00:17:47,399 Speaker 2: Beamster Boor. Sage Bauman is Bloomberg's head of podcasts. If 318 00:17:47,440 --> 00:17:50,439 Speaker 2: you liked this episode, make sure to subscribe and review 319 00:17:50,480 --> 00:17:53,280 Speaker 2: The Big Take wherever you listen to podcasts. It helps 320 00:17:53,320 --> 00:17:56,760 Speaker 2: people find the show. Thanks for listening, We'll be back 321 00:17:56,920 --> 00:18:00,560 Speaker 2: tomorrow