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NycEve

Why Democrats Must Investigate the Insurance Industry

Did you know that in America it's legal to sell crap insurance to unsuspecting consumers? Let's begin by calling these policies what they are, fraudulent.

This is exactly what's happening to some Americans. It's but one more reason, as if we needed any others, that the new Democratic Congress must immediately convene an investigation of this predatory and out-of-control industry.

Meet Mega Life and Health. It sells insurance via commission salesmen to beleaguered and desperate Americans. Americans who work hard and play by the rules and are frantic for any affordable insurance coverage.

Then when the enrollee becomes ill, he discovers that the policy is worthless.

Interesting. This company won't even allow me to provide a working link to their web page. This tells me we're knee-deep into what I would call, red flag territory. This company is selling ice to the Eskimos, it's rotten.


If you can, stay far away from this un-American, un-patriotic, Texas-based scam-operation. They are in business to harm you.

Also hug your lawyer, because your lawyer is fighting for you and me in an often hostile legal environment

The legal system should protect us from companies like this. The courts should stand shoulder-to-shoulder with the American people. However the judge hearing the Mega Life and Health case feels otherwise. He says this is America, this is legal, and you should have read the fine print.

Apparently this is a legal con operation, and it should scare you, and make you very angry.


A Nevada County Superior Court judge has dismissed a lawsuit filed by a Penn Valley husband and wife who claimed they were duped when they bought health insurance from a Texas firm and were plunged into a financial crisis after falling ill.

Judge Albert P. Dover rejected the claims of David and Darlene Henderson, saying they received exactly the benefits they signed up for when they bought a policy from Mega Life and Health Insurance Co. of North Richland Hills.

Dover suggested consumers must read the fine print before they buy any insurance policies, adding he saw no evidence that the insurer or its sales agents engaged in any fraud or made misrepresentations.

. . ."The court's decision is rather frighteningly: 'Buyer beware,' " Stuart said. "Dave Henderson was promised catastrophic coverage, and he got limited coverage. He got a mild discount on his expenses."

. . .The Hendersons, who run a small directory business from their Penn Valley home, went to court in 2003. The couple bought health insurance through the National Association of Self-Employed and its sales agent.

For $400 a month, the couple said, the Mega agent told them that they could have a catastrophic group health insurance policy that would cover 80 percent to 100 percent of their hospital costs up to $1 million.

. . .The California Foundation of Taxpayer and Consumer Rights has denounced Mega Life policies as "skeletal."

The group said Mega Life's policies are so technical and riddled with jargon that the Hendersons were unlikely to have understood its limits if they had read it.

http://www.sacbee.com/...

Health insurance in America. Repeat after me: Deny, Delay, Deceive.

Now meet the victims of Mega Life and Health.


The idea was to relax. After 40 years in publishing, David and Darlene Henderson retired nine years ago to Penn Valley, Calif., a sleepy town 60 miles north of Sacramento. The couple signed up for health insurance through the National Association for the Self-Employed (NASE), a small-business group that offered them both coverage through MEGA Life & Health Insurance Co. for $416 per month. A brochure stated that the plan would provide up to $1 million in coverage.
http://www.businessweek.com/...

Okay, friends, this is happening across America and we must demand that it be fixed through Federal oversight and legislation designed to close down and punish these companies who traffic in human illness and misery.


Then in 2000, Darlene found a lump in her breast and had a mastectomy. The next year, David had emergency surgery for an aortic aneurysm, followed by three colon procedures. By April, 2001, their medical bills totaled more than $210,000. But for David and Darlene, both 66, the troubles were just beginning. MEGA refused to cover Darlene's bills because, the company alleged, her breast cancer resulted from a preexisting condition she had failed to disclose. The Hendersons say they held back no such information. And MEGA's benefits, which the Hendersons allege were poorly explained, covered only $33,169 of David's $191,424 in bills. "You think you're on a sunny sea," says David. "Then you're sucked into this Bermuda Triangle." The couple has filed a lawsuit against NASE and MEGA's parent company, UICI, based in North Richland Hills, Tex., charging fraud and unfair business practices. The company denies those allegations.
Americans go to companies like Mega Life and Health for one reason only. Because these scammster outfits offer "affordable" insurance. And because to be self-employed in America, presents you with such enormous obstacles in accessing and obtaining affordable health insurance coverage, that in many states you have few or no other options.


The Hendersons aren't alone. Three major players in the individual insurance market, including UICI, have racked up an inordinate number of complaints for their size. In addition to UICI, Golden Rule Insurance and American Medical Security have been hit with a barrage of state investigations. In fact, since 1995, MEGA and the other main unit of UICI, Mid-West National Life Insurance Co., have been the subject of 14 investigations by state insurance officials, according to data provided by the National Association of Insurance Commissioners (NAIC).

The investigations, though, haven't fazed investors, including Blackstone Group, which on Sept. 15 bought UICI for $1.7 billion. With their often hefty margins and growing profits, smaller companies that offer individual insurance are in demand. The Blackstone deal follows the purchase last December of American Medical Security by PacifiCare Health Systems (PHS ) in Cypress, Calif., and UnitedHealth Group's (UNH ) deal for Golden Rule in 2003. The new parents are making progress cleaning up these companies, but some question whether they will finish the job. Warns California Insurance Commissioner John Garamendi: "They damn well better."


As a nation, we are barreling headfirst into a healthcare catastrophe of unimaginable proportions. There remains only one viable solution, a universal, single payer sytem which guarantees coverage to all Americans and removes the criminal element (for-profit insurance companies) from the equation.

As employers stop offering health insurance benefits because the premiums costs are skyrocketing, these essentially worthless individual polices will ensnare more and more Americans.


The individual health insurance market is poised to boom. With 45 million people uninsured and penny-pinching companies cutting back, more Americans are being forced to get their own protection. The number of people buying health insurance on their own jumped by 900,000, to 17 million from 2000 to 2003 -- the latest year for which data are available -- according to Mathematica Policy Research Inc. Meanwhile, employment-based coverage fell by 5.2 million, to 159.2 million.

Think of it this way. The American people have been tossed overboard by the government and forced to swim unprotected in shark-infested waters.

Speaker Pelosi, Majority leader Reid, please throw us a life vest.

NycEve: Author Bio | Other Posts
Posted at 8:18 PM, Nov 13, 2006 in Civil Justice | Health Care | Health Insurance | Insurance Industry
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Comments

If you can, stay far away from this un-American, un-patriotic, Texas-based scam-operation. They are in business to harm you.

Good grief. It's ridiculous when they do it at LGF, and it's ridiculous to do it here.

Posted by: Seth | November 14, 2006 8:49 AM

What's most disturbing to me here isn't the company selling a crap product (a common problem in America today), it's the deceptiveness of the way the thing is being sold. Salesmen are answering potential customers' inquiries with deceit or outright lies. Worse yet, the National Association for the Unemployed, which pretends to be a sort of trade association which is using its position to negotiate better health insurance rates for the self-employed, is actually a wholly-owned front for Mega.



Additionally, there are a lot more people affected by Mega than most of the articles on the issue mention. Mega has a sub-division called 'Student Resources' which peddles its crap insurance policies to children and college/grad students all over the country. They're pretty much the major insurer for students... Colleges, student associations, and various trade associations all act as middlemen in offering Mega insurance policies to their student members as a benefit of enrollment.



The university where I went to law school pitched us a Mega insurance policy (and I have at least one friend who was brutalized by it when her pregnancy turned out not to be covered because it wasn't an "illness"). So did the ABA, although they also offered optional major medical coverage that patched some of the gaps in Mega's standard policies.



Of course I'm sure politicians give even less of a shit about naive college students than working class families. But this is just another vulnerable group that is being exploited by Mega, and by the schools and associations that patronize it. It's hard to say whether these groups are just too ignorant to realize how bad the coverage is, or whether they simply don't care that they are helping deceptively market bad insurance. But NASE definitely knows.

Posted by: Lindsay | November 14, 2006 10:28 AM

Truth does hurt, Seth.

Posted by: nyceve | November 14, 2006 3:33 PM

It's fascinating how this blog is so over the top that one of the authors is now bashing a Public Citizen employee for insufficient political correctness.

Posted by: Ted | November 14, 2006 6:52 PM