A Legal Scam

After David and Darlene Henderson had more than $210,000 in hospital bills, their health insurance company only paid $33,428, leaving more than $180,000 for the Henderson’s to pay by themselves.

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.

Obviously not.  So the Henderson’s tried to file a lawsuit against the MEGA Life and Health Insurance Company to get some assistance with their bills.

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.

It’s obvious that the agent probably said “this policy really won’t cover anything if you have a big claim, see it says that here and here.”

Then, I’m sure the Henderson’s said “and for only $400 a month huh?  Where do we sign?”

The couple bought health insurance through the National Association of Self-Employed and its sales agent.

The Henderson’s asserted their agent didn’t emphasize or explain critical information:

• There was no cap on their out-of-pocket expenses with Mega Life, unlike traditional health insurance available through large employers.

• Their benefits had daily maximums far below the average cost of modern-day medical procedures and hospital stays.

The Henderson’s said that they hadn’t read their policy’s fine print but acknowledged they looked at an agent’s term sheet describing the policy.

Heenan said there were no misrepresentations.

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 Henderson’s were unlikely to have understood its limits if they had read it.

Read the article Health Fraud Suit is Tossed, I found it by reading this post on The Health Care Blog.  MEGA Life and Health and Mid-West National are two health insurance companies doing business in Colorado that operate under the disguise of being referred by a non-profit consumer advocacy group.  MEGA uses the “NASE” and Mid-West uses “Alliance for Affordable Services”.  They are both owned by the company Healthmarkets (formerly UICI) and account for 1.01% of the market share of Colorado health insurance companies.  You can read more about them here.

tags: MEGA health insurance NASE

About Jay Norris

Jay operates a health insurance brokerage in Colorado, where he helps individuals and small groups obtain and maintain health insurance coverage.
Complimenting his work as a health insurance broker, Jay also provides data analysis and creates visualizations that are easily understood by consumers and other stakeholders in Colorado’s health insurance market.

Speak Your Mind