© Reuters. FILE PHOTO: The office building of health insurer Anthem is seen in Los Angeles, California

(Reuters) – The U.S. House Committee on Energy and Commerce on Wednesday launched an investigation into 12 health insurers, including Anthem (NYSE:) Inc and UnitedHealth Group (NYSE:), over their sale of short-term plans.

Terming the short-term plans as “junk”, the committee said it was troubled that consumers who sign up for the plans are being misled about the nature of the coverage they are purchasing.

“The Democrats cite concerns over several troubling reports of STLDI (short-term, limited duration insurance) plans denying coverage entirely, charging more based on age, gender or health state, or refusing to cover consumers for care that may stem from what the company deems a pre-existing condition,” the panel said.

Shares of Health Insurance Innovations Inc fell nearly 20 percent, while eHealth Inc dropped 4.8 pct. Shares of Anthem and UnitedHealth Group pared gains, but were still up between 2 and 3 percent.

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2019-03-13