Reprinted with permission from ProPublica
“Trumpcare" insurance will “finally fix healthcare," said an advertisement on Facebook.
A Google ad urged people to “Enroll in Trumpcare plans. Healthcare changes are coming."
The problem is, there's no such thing as “Trumpcare."
Facebook and Google have promised to crack down on lies and misinformation about politics in the run-up to next month's presidential election, but they have run tens of thousands of ads in the past year containing false claims about health insurance reform and plans.
The “Trumpcare" ads don't appear to have a political aim and don't advocate for the reelection of President Donald Trump over former Vice President Joe Biden. Nonetheless, the Facebook ads touting these nonexistent products have been viewed some 22 million times in the past year, disproportionately in battleground states like Texas, Florida, Georgia, North Carolina, Ohio and Pennsylvania, according to Facebook data.
The ads are placed by marketers targeting consumers — politically conservative ones in some cases — who become sales leads if they respond. Then the consumers get deluged with phone calls from brokers hawking health insurance plans that are not the comprehensive solution that's often promised, but instead are less conventional products that have traditionally been used as supplemental coverage or for when people transition between jobs.
The Affordable Care Act requires traditional health insurance plans to provide “minimal essential coverage," which includes preventive care, mental health care, substance abuse, maternity and more. The less-conventional plans are exempted from those requirements. Some of the plans are offered by name-brand companies like UnitedHealthcare, but critics say they're typically big moneymakers for the companies that can leave patients with unexpected medical bills. The plans' limitations often are not explained in the advertisements or in brokers' high-pressure sales presentations. Hundreds of complaints about the plans show up on consumer sites like the Better Business Bureau or Yelp.
“The marketing is extremely deceptive," said Sabrina Corlette, a research professor at Georgetown University's Center on Health Insurance Reforms. “Both the advertising and the brokers use terms that to the average consumer would make them think they are buying a comprehensive insurance plan that provides coverage if they get injured or sick. But quite often nothing could be further from the truth."
The misleading marketing may be ensnaring more consumers now, as an estimated 14 million Americans have lost employer-sponsored health benefits due to the COVID-19 pandemic.
Google and companies involved in the marketing generally defended the term “Trumpcare," saying it's legitimate to use to describe the president's general philosophy about health care or his 2017 executive order that allowed short-term insurance plans to cover a time period of up to 12 months rather than three months. Facebook said the word “Trumpcare" on its own didn't violate its rules. However, Facebook and Google both initially accepted “Trumpcare" ads that, after they were flagged by ProPublica, the companies later said did violate their rules.
A ProPublica reporter responded to one of the “Trumpcare" ads and took calls from five insurance brokers. The brokers seemed to have no idea what type of ad had led to the call. They were focused on closing the deal. One said, wrongly, that “Trumpcare" was just a new name for “Obamacare." The other four acknowledged that there's no such thing as “Trumpcare."
“It's fake news," said one.
“Trumpcare" “is not even in existence yet," said another.
“They're starting to change over from 'Obamacare' to 'Trumpcare,' but it hasn't switched over yet," a third broker said.
Traditional health care plans sold under the Affordable Care Act must comply with a host of regulations, including not discriminating against people with preexisting conditions. But the plans are expensive, and some consumers may not qualify for the income-based subsidies that reduce the cost. For example, a 40-year-old single person who makes more than $50,000 would likely not qualify for a subsidy to help pay for an individual health care plan, according to the Kaiser Family Foundation Health Insurance Marketplace Calculator.
The less conventional plans — called short-term, fixed indemnity, accident-only or specified disease plans — offered by the brokers are less expensive. Some provide benefits for a short term or give a fixed payment to cover a portion of a doctor or hospital bill. Others pay out only if the beneficiary had some type of accident. A purchaser would need to read the fine print to know what they did or did not cover.
ProPublica contacted the Federal Trade Commission and insurance regulators in all 50 states and found hit-and-miss enforcement of misleading ads and sales tactics. Some states, like Delaware and Virginia, have meted out discipline for using misleading tactics to sell the limited plans. But many have not. Most who spoke to ProPublica said they have no jurisdiction over the online “lead generation" advertisers. The regulators say it's like playing “whack-a-mole," as those caught using abusive marketing tactics can simply incorporate under a new name and resume the same behavior.
Online “Lead Generators" Lure Consumers
Identifying deceptive tactics related to health care plans is as easy as going online and looking.
Southern California marketer Stuart Millar said he's placed “Trumpcare" advertisements to join in “the gold rush of online entrepreneurship."
Millar has spent at least $350,000 on 12,500 “Trumpcare" ads from four Facebook pages with “Trumpcare"-themed names since last October. “Thanks to our President," one of them said, “U.S. health insurance companies have had to drastically drop their rates." (ProPublica can see how much Millar spent because he had proactively marked his ads as political, triggering Facebook to disclose this information.)
Millar isn't an insurance broker — one of the people who sell insurance and are regulated by the states. He's a “traffic broker," a marketer in charge of running ads to drive visitors to his clients' websites. There's little regulation of his activities. His ads have focused so much on the term “Trumpcare," he said, because it's clickbait. He called it far more attention-getting than the “left-wing one," his term for “Obamacare."
“I've got to find a fun way to make health care interesting," Millar said. “'Trumpcare' is interesting but health care in general isn't."
“Traffic brokers," like any Facebook advertiser, can select the specific demographics of the Facebook users who will see their ads.
Millar declined to get into details about how he targeted his ads, but said he mostly relied on Facebook's algorithm to find him the people who'd click. He said he tested thousands of iterations of the ad to make sure it found an audience. “What I went with was what converted," Millar said, a reference to people responding to the ads.
Some “Trumpcare" ads — not apparently linked to Millar — have been targeted at people Facebook labels as “interested in Donald Trump," according to targeting data provided by Facebook to users along with ads that are shared with the Ad Observer project.
Millar says he didn't come up with the idea of using “Trumpcare." That came from his clients, whom he wouldn't name. Many of Millar's ads led to a page featuring a red, white and blue “Trumpcare" logo on HealthPlansAmerica.org, which is owned by a company called Apollo Interactive. (The company is not a nonprofit, but anyone can buy a .org website address.)
Apollo Interactive isn't an insurance broker either. It's what's called a lead broker, yet another cog in the lightly regulated machinery of insurance “lead generation" marketing. That means it gathers profiles of people who are looking for health insurance. Those who input their information on these sites become “leads." And then they're put up for auction.
Officials from Apollo Interactive wouldn't say how the company sells leads. But Colin Sholes, an activist and former online health insurance marketer, said lead generators extract an anonymized sample of each person's data: ZIP code, age, gender. This profile, without any contact information, gets shared with potential buyers, who bid for it in an instant, automated auction. The winning bidder or bidders get the person's name and their contact information.
Leads are often sold as “shared leads" — meaning they're sold to more than one buyer at the same time. Some of the buyers are insurance brokers. Some are other lead brokers who bid so they can resell data that originated elsewhere. “It's a big web and everybody's interconnected," Sholes said. “A lot of data just floats around."
So how much is each “lead" worth? Sholes estimated that a lead for a person under 55 would cost as much as $20.
The lead might be even more valuable if it was sold as what the industry calls a “warm lead," he explained. Some companies exist just to buy leads, then have a call center agent call and, if a human picks up, the agent “warms you up," Sholes said. That means they check to make sure the consumer is interested in buying insurance. At that point the company sells the call to an insurance broker as a “warm" transfer. “A connected call," he said, might sell for up to $80.
Millar confirmed he got paid by the lead, but he refused to say how much. He did say that he made a profit on what he paid Facebook to run the ads. He was not aware of what happens to consumers who click on his ads, then purchase the health plans. “I didn't ever call in myself. I am not exactly sure how any of that works."
Facebook, Google Profit From Misinformation
This fall, someone Googling for affordable health insurance might have come across an ad that said: “Healthcare changes are coming. Check out the new pricing tiers under the American Health Care Act."
The American Health Care Act — the bill most commonly called “Trumpcare" — failed to pass the Senate in 2017 when the terminally ill Sen. John McCain dramatically walked across the chamber's floor and gave a thumbs down, leading to the bill's defeat. So there were no new “pricing tiers" on offer, as the ad claimed, in 2020.
Those ads led to Apollo's HealthPlansAmerica.org site. Apollo Interactive attorney Chris Deatherage said in a written statement that the Google ads “appear to be old ads" from when AHCA “was actively being discussed in the legislature."
Deatherage said “Trumpcare" is an “abstract" term used to “tie together" various pieces of intended or existing legislation and policies and that Apollo's “Trumpcare" website said the term refers to Trump's “collective policy updates." He compared it to “Obamacare" — which specifically refers to the Affordable Care Act — and proposals for “Medicare for All," which are not law. He added that Apollo Interactive's website lets visitors connect with brokers who can explain the term.
Google's rules say it does not allow ads that “deceive users by excluding relevant product information or providing misleading information." Facebook says it bans ads with “deceptive, false, or misleading claims." But both accepted the “Trumpcare" promotions. Google even gave the misinformation prime real estate, with the ads as the top-listed results when people search for affordable health insurance.
Christa Muldoon, a spokeswoman for Google said, “Health care ads cannot make misleading claims about the advertiser's identity or the services they offer." She said Google removed the ads referencing AHCA under that policy after ProPublica contacted Google about them. She wouldn't explain why the company apparently let the ads run for years, despite violating Google's rules.
Until last year, Google also sold ads that lured in consumers with the phrase Healthcare.gov — the federal government site where you can purchase plans that comply with the Affordable Care Act — even though they were for private, lead-generation websites.
It's not clear how much Google earned from selling “Trumpcare" ads. Unlike Facebook, Google doesn't consider ads about “Trumpcare" political, so it doesn't publish any data about them. Muldoon would not say how much Google made from the ads.
But, she said, citing Trump's executive orders on health care, “We do not consider the phrase 'Trumpcare' alone to be misleading," so it's allowed in Google ads.
A report a year ago from Sen. Bob Casey, a Pennsylvania Democrat, criticized Google and other search engines for showing ads for for-profit lead-generation sites listed above the official Healthcare.gov site when a person searched for “Obamacare" or even “Healthcare.gov." Casey called for search engines to put an “answer box" above all content, even ads, with a link to Healthcare.gov on searches for health insurance.
Muldoon hinted at a coming change to what kinds of health insurance-related ads the company will allow. She said that Google is “evaluating the health insurance space to strengthen our protections for users and prevent misleading ads."
After Newsweek flagged the Facebook ads in a blog post in August, the Lead Stories news organization published a fact-check saying that “there is no such thing as Trumpcare." That prompted Facebook to stop accepting the ads, under a policy that bans ads with content that fact-checkers have found to not be true.
Devon Kearns, a Facebook spokesperson, told ProPublica that some of the ads were removed for violating a Facebook policy that bans “scammy tactics."
But then in mid-September, more “Trumpcare" ads appeared on Facebook, from something called “National Center for Medical Records," which didn't return a request for comment. These ads led to another company's website, not Apollo's. One of them featured a smiling Trump with his arm around the shoulder of a doctor and the slogan: “Trumpcare from $1/Day."
Omissions And High-Pressure Sales
ProPublica wanted to learn more about the sales tactics involving “Trumpcare" ads, so we checked for ourselves. One of the reporters on this story, Jeremy, had been laid off in May. So he clicked on an ad in Facebook's ad transparency portal, featuring photos of a health insurance card and a tuxedoed Donald Trump with Melania Trump in a ballgown. It took him to HealthPlansAmerica.org, which prompted him to input his contact details, as well as his age, gender, address, income range and whether he had any “major medical conditions."
Jeremy is young and healthy, and he answered the questions honestly, so his information made him a hot prospect.
Jeremy entered a burner phone number that he acquired for this project — a good choice, because he got 67 phone calls the day he submitted the form; the day after, he got 46 more. The plans the brokers offered were legal, to the extent that they gave enough information to check. But to be informed, a consumer would want to know each plan's limits and exceptions and be provided with detailed information about what's covered, or not. The brokers often withheld crucial information.
Alex, from “the Enrollment Center," said his plan offered free preventive care and would let Jeremy pick his own doctor. Using the lingo of the Affordable Care Act he described the insurance as a “minimum essential coverage plan." But that's exactly what it was not. Jeremy, who is married with no children, had to ask if the plan covered maternity costs, something that might be relevant to a childless couple. Alex said that would require something else, a “major medical plan."
When Jeremy asked Alex to email the plan documents, so he could read what the plan covered or excluded, the line disconnected. Alex never called back.
When we called back several weeks later to ask for comment, the line was apparently disconnected.
Another company, “Modern Health," would not even provide a brochure about its health plans. A supervisor named Louis said he was “in charge of the company" and that it would be a violation of patient privacy laws to send information in writing about the plan. (It isn't.) Those details would supposedly have to come from the insurance company, and only after Jeremy signed up.
Anthony, who said he worked for the “National Health Enrollment Agency," also wouldn't send anything in writing. But his reason made it sound like he needed to lock in a fare on a flight that was rapidly running out of seats. “Once we disconnect the line, the companies aren't going to let me hold onto the plan," he said.
When Jeremy said he wanted to talk it over with his wife, Anthony countered: “Is she a licensed broker?" He offered to add her to the call rather than have the couple discuss it alone.
None of the salespeople volunteered the details a consumer would need to make an informed choice. Brandon, the salesman from Modern Health, for example, offered a plan from a company called “HealthShield." It's for “things like emergency surgeries, hospitalization, ambulances and prescriptions," he said. He went into painstaking detail about the amount it paid for certain items. But when asked if he'd shared everything Jeremy needed to know, he said, “It does have your essential package that a lot of people sign up for, especially at this time." Only later, when asked what category of insurance the plan fell under, did he say that “they do remove certain things, which include substance abuse, mental health and maternity benefits."
Reached for comment for this article, a man who said that his name was Brandon Greer and that he was now in charge of Modern Health said “I'm not sure" when asked if these omissions might confuse consumers. He said that the company instructs its salespeople to note the exclusions “upfront." He then ended the call.
When we tried to reach the National Health Enrollment Agency minutes later, to get a comment for this story, the phone rang at the offices of Modern Health. The person who picked up denied knowing what the National Health Enrollment Agency was and hung up when asked his name.
Omitting the details of health insurance plans can harm consumers. In August, the Government Accountability Office, the auditing and investigative unit of Congress, published a secret shopper investigation of the sales tactics for the plans. GAO investigators tested 31 brokers by using a fake persona, a person who had a preexisting condition. Eight of the 31 brokers made misstatements, the report says. One was selling the GAO investigator — who claimed to have diabetes — a health insurance plan that the broker said would cover the investigator's diabetes, but it really didn't. In a different case, the investigator told the broker that they had diabetes, but the application completed by the sales representative said there was no treatment or diagnosis for diabetes in the past five years. “This indicates that the broker may have intentionally falsified information," the report said.
The GAO didn't disclose the names of any of the brokers in its report, but it said it referred them to the Federal Trade Commission and state insurance regulators.
“Garbage" Insurance Generates Profit
USHEALTH Advisors, one of the companies whose broker contacted Jeremy, posts videos online to show off how much money its brokers are making selling limited insurance plans.
“How much can you earn monthly at US Health Advisors?" asks one of the videos, posted by US Health Advisors Coral Springs.
“$16,000," says a bearded man in a black shirt and tie.
“$18,000," says a woman in a sleeveless top.
“$34,000," says a man in a dress shirt and tie, a family photo in the background behind him.
Then, the closer: “$42,000 — in one month," a man says.
Justin Brain, the USHEALTH benefits specialist whose number is on the US Health Advisors Coral Springs Facebook page, said commissions vary depending on a broker's “production," or sales totals. He declined to say how much the commissions were per sale, but he said the video is used for bringing in new sales recruits to “give them what's possible."
An April study by the Urban Institute found brokers making commissions of around 25% for the type of plans offered by the company. Other insurance brokers told ProPublica the commissions on some plans could be as much as 50%.
The video closes with a USHEALTH Advisors logo that adds, “A UnitedHealthcare Company." UnitedHealthcare is a massive company that provides health insurance and benefits. It's part of UnitedHealth Group, one of the largest companies in the country, with $242 billion in annual revenue in 2019. UnitedHealthcare declined to say how much the brokers made in commissions.
A USHEALTH broker pitched Jeremy a plan sponsored by Freedom Life Insurance Company of America, which is also a UnitedHealthcare company. The broker characterized the coverage as similar to Affordable Care Act plans and sent a 36-page brochure that laid out the details of the offer.
The document he sent made it clear that the Freedom Life plan would provide limited coverage that could leave a person with hefty bills. But it would take an exceptionally savvy consumer to sort through dozens of pages of insurance jargon to understand that. At ProPublica's request, Jeffrey Hogan, the Northeast regional manager for Rogers Benefit Group, a national benefits marketing firm, examined the document.
Hogan pointed out that it disclosed on Page 3 that the plans would “supplement" any “essential health benefit plan," meaning one of the more comprehensive plans sold under the Affordable Care Act. If this plan was meant as a supplement, then it would not be ideal for an uninsured couple. This was not mentioned in Jeremy's sales presentation from the Freedom Life broker.
One portion of the plan listed its “maximum" benefit for various “defined" sicknesses. It did not say what its “minimum" payment might be. The daily maximum paid under the plan for an X-ray would be $50. For a CAT scan it would be $200. For an outpatient lab it would be $30. Each of those procedures could cost many hundreds of dollars more than the maximum benefit.
Hogan called the plan a “cascading mess" of coverage for specific conditions. “I wouldn't sell this stuff if it was the last piece of garbage on earth," Hogan said.
The limited benefit, accident or defined benefit plans like the ones offered by Freedom Life are highly profitable for the companies that operate them, Hogan said. “They pay very little out on the dollar," he said.
In 2019, Freedom Life took in $171 million for Accident and Health policies covering about 291,000 people, according to a report by the National Association of Insurance Commissioners. Its “loss ratio" was 46%, the report said, which means Freedom Life spent less than half of what it brought in from premiums on medical claims and funding its reserves. That leaves plenty of revenue for profit and to pay commissions and fees to brokers and lead generators.
By comparison, the plans sold under the Affordable Care Act have a minimum loss ratio of 80% to 85%, meaning 80 to 85 cents of every dollar must be spent on medical care for the people paying premiums. If companies spend less, they are required to refund the difference to consumers or employers.
Hogan said that he's been selling insurance for 35 years and that it wasn't easy for him to sift through all the jargon and limits and caveats about coverage in the Freedom Life document. One of the most insidious details was “buried" on Page 22, Hogan said. That's where the company disclosed that any cost incurred as a result of a preexisting health condition would not be covered under the short-term plan included in the package. “This just makes my blood boil," Hogan said. “This hurts people."
Maria Gordon-Shydlo, a spokeswoman for UnitedHealthcare, said in an email the plans provided by USHEALTH provide “valuable health coverage options to meet people's individual financial and care needs." Its brokers present various options, including Affordable Care Act plans, to help people find the plan that's best for them, she said.
Jorie Jacobi, a 31-year-old from St. Louis, signed up for a plan through Freedom Life Insurance in 2018 when she was working as a freelance writer. She searched for affordable health insurance on Google and put in her phone number on a website that promised she'd receive quotes. She got inundated with phone calls that went on for more than a year.
Jacobi is relatively healthy, so she figured she didn't need to pay for the more comprehensive, higher-priced plans offered under the Affordable Care Act. She spoke to a USHEALTH agent selling Freedom Life and said she was under the impression at the time that the package of limited health plans provided by Freedom Life would make sense for her. Her monthly premium came to $224 — not cheap, she said.
Jacobi admits that she didn't do her due diligence when she signed up for the coverage. “I feel silly about this now, but I just trusted them," Jacobi said. She doesn't remember her exact conversations with the agent, and UnitedHealthcare said that there are no recordings of the sales calls, and that it would not provide a recording or transcript of a follow-up call. Jacobi insisted that she would have made sure she had coverage for routine visits to her internist and obstetrician-gynecologist, but after she went to the doctors she received bills for lab work that came to $311 and $710.
After about a dozen hours on the phone with Freedom Life's customer service representatives, Jacobi said the bills still hadn't been paid. So she wrote a negative review on Yelp. That led to a phone call from a company vice president who helped make sure the insurer paid the bills.
In another case, the Freedom Life plan did not cover a drug Jacobi needed. And when she needed a minor surgical procedure she learned it would not be covered by the plan, so she paid cash.
Gordon-Shydlo, the UnitedHealthcare spokeswoman, said Jacobi had selected coverage that had a lower premium but only covered specific diseases, accidents and other items. The insurer complied with its “stringent application process" and addressed Jacobi's questions and correctly paid her claims, Gordon-Shydlo said.
Jacobi is now covered by a health plan sponsored by her employer. She regrets getting caught up with Freedom Life. “It makes you feel really stupid that you fell for it," she said.
Regulators Play “Whack-a-Mole"
Frank Pyle has been chasing junk insurance companies for years as the director of market conduct enforcement for the Delaware Department of Insurance. “As soon as you take one down another one pops up in its place."
Pyle said regulators across the country are aware of misrepresentations by insurers selling limited, short term, accident and defined sickness plans.
Pyle and his team in Delaware have to get throwaway phones when they play secret shopper on the lead generating websites, because the lines get inundated with so many calls from brokers.
In one investigation, Pyle said his team listened to a random sample of 87 recorded sales calls from a particular company. At least half of them contained some form of deception, he said. The level of misrepresentation seemed to depend on the savviness of the consumer, he said. A consumer would ask if the limited plan was the same as an Obamacare plan and the broker would tell them it's just as good. If the consumer asked if the plan covered diabetes, the broker would tell them it did when it didn't, he said. The case resulted in a fine against the company, he said.
When some states identify violations, they impose weighty penalties, like fines or revoking the license of a broker. But in others the penalties are light or sometimes limited to warnings.
The Virginia State Corporation Commission settled a case for $6,300 with Freedom Life that alleged the company misrepresented benefits or terms of a policy with advertising that was “untrue, deceptive or misleading" and failed to give applicants a summary of their rights. The company agreed to a corrective action plan that addressed the alleged violations, documents show. Gordon-Shydlo, the spokeswoman for UnitedHealthcare, which owns Freedom Life, said in an email that the company's brochures included notices about the limitations of the products and that the company did not admit to any violation of the law.
It was hard to find state regulatory agencies that had taken action against lead generating companies. One state insurance regulator, who spoke anonymously because he didn't want his colleagues to be criticized, said his agency “probably" has the authority to regulate the lead generators, because they are engaged in selling or soliciting the sale of insurance. “But it's something we haven't done in the past," the regulator said. “It's something that hasn't been the best use of our time."
New Mexico's superintendent of insurance issued an official warning, saying it intended to hold insurance brokers and companies responsible for “abusive marketing practices by lead generators." It also said the kinds of sales tactics used by brokers — such as referring to limited plans with terms associated with “Obamacare" plans — were misleading and deceptive, and banned them.
Corlette, the Georgetown insurance expert, said the Federal Trade Commission could take a “more aggressive" look at deceptive advertising and lead generating. An FTC spokeswoman said in an email that the agency is “concerned with illegal lead generation across the board," but could point to only five enforcement actions that related to the deceptive marketing of health care plans. Only one of the cases took place within the past five years. None involved Millar or Apollo Interactive.
The FTC's jurisdiction includes almost any sales claim that is “unfair" or is misleading and would affect a consumer's decision to buy, says Aaron Rieke, a former FTC staff attorney. Because the agency is “super understaffed for their jurisdiction," he said, its attorneys aim to take enforcement actions that yield real systemic improvement for consumers. But the fact that the lead-generation ecosystem includes many small players who buy ads on Google, Facebook and elsewhere presents a “structural challenge" — because “swatting [them] down doesn't feel like a very effective way to go."
Pyle said the state regulators should hold the insurance companies responsible for their advertising tactics, including the actions of lead generators. In 2016, the Delaware Department of Insurance fined Companion Life Insurance Company $487,000 for violations that included “deceptive acts," documents show. Many of the problems in the case came from the lead generators the insurer was paying to do the outreach to consumers, Pyle said.
A person in the Companion Life compliance department referred ProPublica to its parent organization, BlueCross BlueShield of South Carolina. But no one returned requests for comment.
Pyle said he's troubled that legitimate insurance giants own some of what he calls the “bad companies." “I'll be honest with you," he said. “I am surprised UnitedHealthcare is involved as much as it is."
Pyle said regulators from various states have regular meetings and are considering pursuing criminal action against insurance company executives. “If the insurance company is paying someone to work on their behalf, they are responsible for their actions," Pyle said. “You can fine these companies and they consider it the cost of doing business. But if you lock up their CEO in federal prison, they'll think twice about harming our consumers."