Better Business Bureau: FTC halts operations of deceptive health care telemarketers

I wrote an earlier column about an FTC action against a company that led people to believe they were buying comprehensive health insurance.

Simple Health claimed its plans would cover preexisting medical conditions, prescription drugs, primary and secondary specialty care, inpatient and emergency hospital care, surgical procedures, and medical and laboratory testing.

But tens of thousands of consumers ended up with huge unpaid medical bills after finding out all they had was a medical discount or limited benefit plan. For example, a typical Simple Health plan provided no coverage for preexisting conditions, paid only $50 for physician visits and capped them at three per year, and covered a maximum of $100 per day for hospitalization. Enrollment fees were as high as $175 and monthly premiums ranged up to $500.

The FTC obtained a $195 million judgment against Simple Health and its principals; it appears the company is out of business. But, unfortunately, they weren’t the only ones deceiving consumers shopping for comprehensive health insurance.

In January, the FTC got a Florida court to temporarily stop the operations of Top Healthcare Options Insurance Agency and affiliated companies and individuals. The FTC alleged that:

• The defendants targeted consumers shopping for comprehensive health insurance plans on the internet.
• The defendants misled consumers into entering personal information on websites that appear to offer comprehensive health insurance by promoting plans as “Affordable Care Act Plans, “Obamacare Health Insurance Carriers,” and “2024 Obama Care Plans.”
• The websites were actually built for lead generators who collect consumers’ information and sell it to the defendants or their vendors for telemarketing purposes.
• The defendants’ telemarketers called consumers with a pitch to move them away from comprehensive health insurance coverage and toward plans that provide far less coverage, leaving the buyers exposed to thousands of dollars of out-of-pocket medical expenses.

The FTC alleged the defendants violated the FTC Telemarketing Sales Rule and the FTC Act prohibiting deceptive practices. It says they’ve caused tens of millions of dollars in harm to consumers and is seeking refunds and other relief for those affected.

In bringing the action, Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, said, “Health insurance is one of the most important and costly purchases consumers buy for themselves and their families.

Whether shopping for groceries or healthcare, affordability is front-and-center right now in consumers’ decision-making process. This makes ensuring they have all the information necessary to make informed choices even more important.”

There may be other companies peddling sham health insurance products. The FTC and BBB offer this advice to consumers shopping for health insurance:

• Compare plans, coverage, and prices at a trusted source. HealthCare.gov and state marketplaces are the first stop for information about ACA-compliant health insurance coverage.
• Research any company offering health coverage or products. Search online using the name of the company plus “complaint,” “scam,” or “fraud.” Read reviews and check with your state insurance commissioner’s office to find out if there are any complaints. Check them out with the BBB.
• Ask for information in writing. Is the plan really comprehensive health insurance?

Randy Hutchinson President & CEO BBB of the Mid-South.