Fighting for coverage: Short-term health insurance may result in long-term trouble

Amanda Schornhorst deals with chemotherapy for Stage 2 breast cancer while taking care of her family.
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LEBANON, Ind. – When Amanda Schornhorst felt a lump in her breast in October, she didn’t panic. She had experienced something similar before.

“I thought it was a cyst because I had cysts in my breast diagnosed earlier – six years ago – and through mammograms we found it was nothing to worry about,” she told WTHR.

So when Schornhorst visited her doctor for a routine check-up three months later, she was not surprised her physician ordered some tests to rule out any trouble. This time was different. Within two weeks, the 41-year-old mother of two young children was meeting with an oncologist and a surgeon to discuss how to treat Stage 2 breast cancer.

“It’s aggressive and it has spread to a few of the lymph nodes, so the recommendation was chemotherapy right away,” Schornhorst explained. “This disease is terrible. We know there’s a lot of survivors, and I’m going to be one. But I was scared and I’m scared every day.”

Amanda Schornhorst and her husband were facing bills of more than $19,000 for each of her eight chemotherapy treatments.
Amanda Schornhorst and her husband were facing bills of more than $19,000 for each of her eight chemotherapy treatments.

Schornhorst isn't just fighting cancer. For months, she's also been battling her insurance company. Just days after pathologists diagnosed her invasive ductal carcinoma, United Healthcare informed Schornhorst that it would not pay for any of her medical bills while the insurance company took a closer look at her medical records.

“We thought we were going to start chemotherapy right away, then I get a call from the oncologist's office in the billing department that my insurance company has said wait a minute,” Schornhorst said. “My chemotherapy was put on hold because they say my cancer was a pre-existing condition. It makes me so mad. This is the same insurance company I've had for over five years. They would have known if I had breast cancer.”

After delaying treatment for two weeks, oncologist Brian Mulherin determined it would be too risky to wait any longer.

“We just could not wait,” the doctor told WTHR. “Amanda had a very aggressive-looking tumor under the microscope. Would not have wanted to wait months or however long it might have taken for the insurance company to figure things out. She has a curable cancer, but if we waited, it might not have been curable.”

Amanda moved forward with a regimen of eight chemotherapy treatments, which cost more than $19,000 each. Including chemo, doctor’s visits, testing, and other medical procedures related to her cancer, Schornhorst’s treatment resulted in more than $200,000 in bills in just a few months.

“The insurance company has denied every claim we have submitted from the very beginning,” she said, flipping through a large stack of denial notices from United Healthcare. “They even denied paying for the initial mammogram. The financial detriment that I'm doing to our family, do I stop treatment and let the cancer win? The internal struggle that I have because of the amount of bills that come, it's too hard. It's not fair.”

Schornhorst is not alone. 13 Investigates has learned some insurance policies offer minimal coverage for major healthcare claims and might not pay when you need them most.

Saving now could cost more later

Schornhorst purchased a short-term insurance policy that covers her family for 89 days. She has been doing that for several years, renewing the policy every three months. The short-term policy offered the Schornhorsts a huge costs savings. For a family of four, a 3-month policy can cost as little as $400 per month with a $3,000 deductible. A traditional health insurance policy for the same family will cost about $1400 per month with a $6,000 deductible, according to local insurance brokers. An up-front savings of more than $10,000 per year was too attractive for the Schornhorsts to ignore.

“For us, we felt that was the only option to do the short-term plan,” said Schornhorst, who is a stay-at-home mom. “We are very healthy and we don’t go to the doctor very often, so it seemed to make sense.”

But unlike group insurance plans and other full-coverage policies, short-term plans are not covered by protections of the Affordable Healthcare Act. Insurance brokers say that means short-term policies can bring high risk.

“People need to know if you have a pre-existing condition, it’s not going to be covered under a short-term policy, and you’re not going to have coverage for any ongoing conditions,” said Tony Nefouse, owner of Nefouse & Associates Insurance in Indianapolis. “So many families will look at the savings and go with a savings versus a permanent policy, but if they’re going into it blindly and not reading the policy and the exclusions, it can be a bad thing.”

Nefouse says short-term policies are intended for individuals who are very healthy and who need coverage for a brief period of time. While short-term policies can be renewed over and over again, they are risky for longer-term insurance coverage because of what happens when someone gets sick.

“Once you get sick, the insurance company is going to go back and take a closer look to see if they can find any signs the illness was a pre-existing condition. Some of the policies go as far as to say even if you had any symptoms prior to the policy, it’s not covered, so that can cause a lot of problems,” Nefouse said.

And if you are diagnosed with a major illness or have extensive medical bills during the term of the policy, chances are you will not be able to extend the policy beyond the current length of the contract. Once Schornhorst was diagnosed with cancer, she knew her insurance company would no longer renew her policy for another 3-month term.

“I’m not necessarily an advocate of those policies. They can meet short-term needs, but if you get sick or hurt and that policy ends, you could be up a creek without a paddle,” said Indianapolis insurance broker Mark Howard. “Short-term plans are cheap and easy. You apply and say you don’t have a pre-existing condition and, to keep the cost down, the insurance company doesn’t investigate further. They just issue the policy. But when a claim comes in for something big like a heart attack, then they go back and see if you’ve ever had any heart problems. If they can find anything, they’ll deny those claims. Short-term policies are inherently contentious.”

But because of the rising cost of traditional health insurance policies, many families are choosing short-term policies without fully understanding their shortcomings. Often, the first sign of trouble comes after it’s too late.

A growing concern

“This really is a major, major, major problem -- probably one of the biggest problems in cancer care today,” said Mulherin, referring to the restrictions and limitations of his patients’ insurance plans. He says a growing number of patients, like Schornhorst, now have insurance plans not covered by the Affordable Care Act, which means insurance companies are once again legally able to deny coverage for pre-existing conditions.

“I just don’t think they should be able to do that. It used to be very common, then it pretty much went away, and now we've seen it make a resurgence over the past few years as you're getting more of these thread-bare, bare-bones plans that can do this kind of thing,” he said. “For my patients, it creates a lot of stress and anxiety and depression. And it means some people just don’t get care or they get delayed care. It makes me very angry because it seems to me it’s violating the spirit of the law.”

To assist cancer patients like Schornhorst, a St. Vincent Cancer Care Patient Navigator referred her to the Indiana Breast and Cervical Cancer Program. The BCCP provides treatment coverage through Medicaid for qualifying women under the age of 65 who are diagnosed with breast or cervical cancer and who are underinsured.

Schornhorst is frustrated she needed to find assistance when she already had insurance. Both she and her oncologist believe her cancer was not a pre-existing condition under the definition of Indiana law, and Schornhorst continues to fight for her insurance coverage.

“We signed a contract with each other. For over five years we paid our premiums every month like we were supposed to. We did out part, and now when we need them to do their part, they can just throw up their hands and say ‘No, we’re not going to help,’” she said. “As a cancer patient you learn to not give up and to be a fighter. I'm strong enough to beat cancer and I've got a little bit of fight left. I'm going to fight the insurance company – not just for me but for others.”

Sudden change of heart

United Healthcare denied Shornhorst’s medical claims for four months, claiming that her cancer diagnosis was a pre-existing condition and, therefore, “we are unable to cover any expenses for this condition.” With the help of an attorney, she appealed the denial. The appeal was denied, too.

13 Investigates contacted the insurer last week to better understand its decision and to get a comment for this news report.

A company spokeswoman responded late yesterday afternoon with a statement announcing United Healthcare has changed its mind.

“We empathize with Ms. Schornhorst and her family, and will be paying her medical claims under the terms of the policy,” wrote United Healthcare public relations director Tracy Lempner. In a separate phone conversation, she emphasized short-term insurance policies are not a good fit for all consumers.

“They’re meant to fill a gap – not to take the place of a regular health plan. If [Schornhorst] had an ACA-compliant plan, we’d be having a much different conversation,” Lempner said.

News of United Healthcare’s change of heart was met with mixed emotions. Schornhorst was excited.

“It’s a great day. I feel like we did it,” she said, moments after learning of the insurance company’s decision. “People need to know they can fight for their coverage and win.”

Her lawyer expressed frustration.

“I know Amanda is elated, and I’m really happy for her. But It makes me even more angry that customers are required to hire a lawyer and get Channel 13 involved -- essentially force this to go public -- before they make the right decision,” said attorney Rob Thomas. “People should not have to go through all that and incur additional cost and stress to get an insurance company to pay a claim. That’s not what insurance is all about.”