Wake Co. woman stuck with $30,000 surgery bill junk insurance wouldn't cover

A crackdown on junk insurance is coming.

If you haven’t heard that term before, it’s basically short-term limited health insurance. Currently, anyone can sign up for one of these plans and use it for three years. However, the Biden Administration wants to reduce the use of these plans and limit their length from three years to three months.

More information about rules making that change are expected to be announced sometime this year according to one expert 5 On Your Side spoke with.

The goal of the change is to encourage people to only use these policies as emergency coverage, not as a main source of health coverage.

People are drawn to short-term limited duration insurance because of the low cost, but what many don’t realize is how little these policies cover until it’s too late.

Candice Trebus lost her job in May of 2022 and struggled to find a health care plan to fill the gap.

"I realized my Cobra is running out, I have to get a gap coverage until I can actually get a job," Trebus said.

So Trebus ended up doing a Google search for coverage and filled out an online form.

"It wasn’t even 30 seconds after hitting send and I got that phone call," Trebus said. "That was a huge red flag!"

She signed up for a policy with Federal Life Insurance through the person who called her. Weeks later, Trebus learned she needed gallstone surgery.

"This surgery is necessary, it is common," Trebus said she was told.

However, her policy didn’t cover any of the $30,000 bill.

"I’ve never gone under for a procedure and the first time ever I did in my life, I didn’t have enough insurance," she said.

Trebus didn’t realize she signed up for a short-term limited duration plan, also known by some, as junk insurance.

"[Short-term] plans don’t have the same protections as Marketplace plans, they don’t cover nearly as much," explained Nicholas Riggs, Director of the North Carolina Navigator Consortium.

The NC Navigator Consortium is a statewide network of federally qualified health insurance navigators who help people find health care plans on the Affordable Care Act (ACA) Marketplace.

Any health care plan you find on the ACA Marketplace is required to cover 10 essential health benefits:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder services including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care

Short-term limited duration plans are different, they do not have to cover those same benefits.

"The language, it can sometimes, particularly in short-term limited duration plans, can be confusing," Riggs told 5 On Your Side. "It can sometimes appear as though it is a more robust plan than it actually is."

For instance, in Trebus’ case her signed enrollment application lists surgery as a plan benefit. It’s not.

So why did she sign up for this coverage? She said it had a lot to do with what the caller, James Bradley, said to her in his sales pitch.

"He convinced me to sign up with him because he was local in North Carolina, he lived here all his life. I got a nice back story, he himself had this insurance it was accepted everywhere he never had any issues. And he’d been doing this for a long time," Trebus said Bradley told her.

However, when 5 On Your Side dug through state records, we found Bradley is a Florida resident, he got his license to sell insurance in North Carolina in July 2022, just five days before Trebus signed up for her policy. And Bradley wasn’t even authorized to sell Federal Life policies until February 2023.

"I feel embarrassed," Trebus told us about the whole situation.

North Carolina’s Department of Insurance (DOI) is investigating Trebus’ complaint. Federal Life and Bradley sent the DOI statements denying Trebus’ allegations.

Federal Life did tell DOI they would refund Trebus what she paid in premiums. Trebus received a check for $607, but when she tried to deposit it, Wells Fargo rejected if for being an altered or fictitious check. At this time, it’s not exactly clear why the check was returned.

"I would really just like for other people to know that this predatory junk insurance is targeting you, its targeting vulnerable people," Trebus said.

Open enrollment for 2024 begins Nov. 1 and ends Jan. 15. You can find more information about plans that cover those 10 essential health benefits at healthcare.gov.

If you sign up for a plan that is outside the ACA Marketplace, be careful. You can not rely solely on what brokers tell you.

There was a clause in Trebus’ contract saying that regardless of what an agent told her about a plan, it’s the policy terms that actually apply. So, know exactly what those terms are before you sign up.