Telemarketers are blowing up the phones of people in Wisconsin and across the U.S. seeking health insurance, trying to sell them plans that promise great benefits. But according to a recent Bloomberg investigative report, these plans offer little-to-no coverage.

Zachary Mider, co-author of the Bloomberg article, recently joined WPR’s “Wisconsin Today” to explain the loophole through which people are legally selling these insurance plans.

“It’s a new kind of coverage that’s only existed for a few years,” Mider said. “These companies have figured out how to turn health plan buyers, on the other end of a telephone call, into employees. … It opens up this loophole, which allows the telemarketer to sell you a plan that doesn’t meet all the Obamacare standards, [like] preexisting conditions, hospitalization and prescription drugs.”

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“Typically, insurance is regulated by states,” Mider added. “But these plans are claiming that, since it’s an employee relationship, it’s not subject to state insurance law at all.”

The Wisconsin Office of the Commissioner of Insurance said it’s aware of this situation happening across the country. Mider shared public records with “Wisconsin Today,” including a cease-and-desist order from the Wisconsin insurance office against one of the businesses selling these extremely limited and misleading insurance plans.

To learn more about what Wisconsinites can do to protect themselves and spot deceptively marketed health insurance plans, “Wisconsin Today” also spoke with Bobby Peterson, attorney and executive director of the Wisconsin public interest firm ABC for Health.

The following was edited for clarity and brevity.

Rob Ferrett: What are the most common ways sketchy health care plans appeal to potential customers? How can you tell if a health care plan is genuinely good or too good to be true?

Bobby Peterson: As hard and as painful as it is, you probably need to look at written documents that talk about the plan benefits. Does it include essential health benefits? Does it have preexisting condition limitations? What networks does it include? Is it a plan that’s regulated by the state of Wisconsin, or is it some other variation that the state can’t even regulate?

Those are some of the plans that we’ve heard from Bloomberg that are out there — people are creating phony Employee Retirement Income Security Act, or ERISA, plans with very poor coverage that people are signing up for, and they can end up with a lot of medical debt.

RF: Health care coverage documents are hard to read. How might they compare to a more legitimate health coverage offering?

BP: First, if you’re asking for the documents and they’re not providing them, that’s a red flag right there. If they’re directing you to a website where you can’t get the documents, that’s a red flag right there. If you’re getting insurance for you and your family for a couple hundred bucks a month, or even under $1,000 a month, that’s hard. What’s the deductible? Is there an out-of-pocket max? If they don’t have anything like that, those are red flags, and you’re exposing yourself to a lot of medical liability. Are they covering prescription drugs? That’s really a key part of any health insurance today, and some of these junk plans don’t cover prescription drugs at all.

Oftentimes, these plans are trying to get you to commit based on verbal promises over the phone: “Send us your information. Put it on a credit card. Pay in advance.” Those are all things that people should be very wary of.

I think going through the marketplace is probably a much better option. It’s very regulated. It has essential health benefits. You know what you’re getting, and you have an opportunity to review the plan and the networks all in advance.

RF: What would you recommend as a starting point in someone’s search for coverage?

BP: HealthCare.gov is a good place to start. Wisconsin has health insurance navigators that you can contact, although navigator funding is facing severe cuts. It’s a really important resource. It gives you impartial information about some options through the marketplace, but also they’ll help take a look at what Medicaid or BadgerCare Plus options are available.

When we [ABC for Health] help a consumer, we’re going to do a careful interview and review. One of the principles that we use is called precision patient advocacy. We look at their income, their medical condition, the diagnosis, if they have a disability, the family size, veteran status, membership of a tribe or a tribal group. Those are all really important questions because that helps us really define which pathway to move toward.

RF: If funding cuts for health care navigator programs do go through, do you worry that people might be more at risk of these deceptively marketed coverage plans without navigators in place?

BP: There are junk plans out there. They’re not worthwhile. And people are being abused. People are being mistreated with these plans and are accumulating a lot of medical debt.

In 2023, we had [about] $1.4 billion in uncompensated health care through Wisconsin hospitals alone. Those numbers are going to go up without navigators helping you get to the right place at the right time. With health insurance, timing is everything. You have to do it at the right time of the month to get coverage the following month.

There are some programs within Medicaid and BadgerCare Plus that offer some backdated coverage — at least for now. Once navigators are gone, it’s going to be really like the Wild West out there. We’re going to see a lot more medical debt. We’re going to see a lot of people facing big, big bills. And when hospitals don’t get paid, they’re under more serious threats, as well.

RF: Here in Wisconsin, Gov. Tony Evers asked for health insurance customer assistance reforms in his budget proposal. As with many parts of that proposal, it might not pass under the Republican-controlled Legislature. What kind of reforms proposed by the governor could be useful?

BP: The thing that really caught my eye was a public intervenor for health insurance. It sounded like a bit of a central clearinghouse for people to contact and get help with some of these issues related to health insurance fails and identifying appropriate coverage. A public intervenor for health insurance would really go a long way toward providing an important governmental service to people who are trying to figure this stuff out on their own.

Coupled with navigators, I think it could be a really good combination. The navigators could help direct people and take care of the easy cases that come in. But some of these cases get very complicated very fast, and people need experienced advocates with backup legal tools and resources to help them pursue their rights. Our system works best when we have checks and balances, and we’re removing a lot of those checks and balances without having that type of service available.