Home Health Care Florida insurers sued for ‘misleading’ consumers with sham health plans

Florida insurers sued for ‘misleading’ consumers with sham health plans

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A class action lawsuit has been filed against two Tampa, Florida-based healthcare companies alleging their role in helping to sell junk insurance plans that left patients saddled with thousands of dollars of debt.

Health Insurance Innovations (HIIQ) and its subsidiary Health Plan Intermediaries Holdings (HPIH) are accused by plaintiffs of perpetrating a scheme to defraud policyholders into believing that they were buying comprehensive medical coverage plans. The complaint alleges that the companies perpetrated the fraud through their third-party vendor Simple Health Plans.

Simple Health Plans was a Health Insurance Innovations vendor that was shut down last year by the FTC for deceptively marketing customers comprehensive health coverage that instead turned out to be extremely limited benefit programs that “effectively left consumers uninsured,” according to the FTC.

Many of the plans that were purchased were so-called limited indemnity plans and medical discount plans, which are non-ACA compliant plans mainly meant as as supplemental insurance. Lawyers for the plaintiffs said the class may include as many as 500,000 policyholders.

The federal complaint filed by the FTC alleged that the company used aggressive outbound telemarketing techniques and deceptive sales practices, including featuring the logos of well known carriers who were unaffiliated with the company, in order to sell their products.

According to the most recent lawsuit, HIIQ and HPIH loaned Simple Health millions of dollars to fund its operations, trained the company’s sales agents and approved the “fraudulent script” used to sell the products.

“Defendants directed, knew about and substantially assisted the scheme, which was orchestrated to induce consumers through misleading websites and standardized and uniform scripts that sales agents were carefully trained to perform,” the complaint states.

Simple Health was largest and most profitable third-party distributor for the companies’ products, generating nearly 50 percent of all revenues earned by the defendants, the lawsuit alleges.

One of the lawsuit’s lead plaintiffs is Ohio resident Elizabeth Belin, who was uninsured, suffering from a pre existing knee injury and was searching for ACA-compliant healthcare.

She found one of Simple Health Plans’ network of websites that deceptively claimed to offer quality health insurance but served to direct customers to telemarketers selling sham coverage.

The misleading sites had names like Obamacare-healthquotes.com, healthinsurance2017deadline.com and myobamacareapplication.com, according to the suit.

Instead of comprehensive medical insurance, Belin ended up purchasing a limited benefit indemnity plan, a medical discount plan and Accidental Death & Dismemberment insurance that she never requested. Her coverage cost $240 a month in premiums.

After undergoing knee replacement surgery, she received bills of $48,000, which was more than her annual salary.

“This scheme victimizes some of the vulnerable patients across the country and these brave plaintiffs were the consumers the Affordable Care Act was designed to protect and they were tricked into something they didn’t know they were buying,” said Jason Doss, one of the plaintiff’s representatives, in a conference call with reporters.

Photo: fstop123, Getty Images

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