Insurance Regulators Investigating Limited-Benefit Plans Amid Allegations Of Deceptive Sales Tactics
Insurance regulators in 36 states led by Alaska and Washington havelaunched an investigation into limited-benefit health plans offered by HealthMarkets, USA Todayreports. HealthMarkets, which has 650,000 members in 44 states, hasreceived fines from insurance regulators in seven states and has facedlawsuits from dozens of members since 2002.
In addition, Massachusetts Attorney General Martha Coakley (D) on Aug. 22 filed a lawsuitagainst HealthMarkets that alleges "deception and unfair practices."State insurance regulators have investigated other health insurers thatoffer limited-benefit health plans, often because of concerns that thecompanies misled consumers about the level of coverage provided by theplans. However, "no other health insurer has had the kind of multistatescrutiny HealthMarkets faces," USA Today reports.
LeslieKrier, an insurance regulator in Washington who has led theinvestigation, said that regulators have examined a number ofHealthMarkets practices "brought to our attention as ... problematic inmany jurisdictions." According to USA Today, the resultsof the investigation, expected this fall, could have "far-reachingeffects" on HealthMarkets and could "set an example for other insurerscompeting for a growing market" for limited-benefit health plans.
Mila Kofman of the Georgetown University Health Policy Institutesaid, "Other insurers want to know what state regulators perceive asproblems and look at whether they are engaged" in similar practices.
HealthMarketsCEO William Gedwed said that the investigation has provided a"tremendous benefit" to HealthMarkets, which received a draft versionof the results on July 31. He said, "A lot of the things they willrecommend to us have already been implemented," adding, "We have astrong commitment to consumers and regulators as we go forward"(Appleby, USA Today, 9/5).
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