Surprise, surprise. MEGA Life and Health and Mid-West National are in trouble again. It’s only been a few years since Colorado fined Health Markets, Inc (the parent company, formerly UICI) $150,000 for misleading consumers. I guess they’re still working on getting that little aspect of business figured out. MEGA and Mid-West do a great job of recruiting new agents who are generally uninformed about the health insurance industry, and then teaching them how to sell a policy that has more holes than Swiss cheese.
The main problem with these policies is that the coverage isn’t adequately explained, and the agents are not properly trained. They aren’t allowed to be brokers and offer multiple options to fit varying consumer needs. Instead, they have to be captive agents, selling only the HealthMarkets products. I wonder how many MEGA policies would be sold if their agents could sell other stuff as well? Maybe that’s why they prefer captive agents…
HealthMarkets has been hit with a $20 million fine after a three year investigation led by insurance commissioners in 29 states, including Colorado. Colorado will get $650,000 in the settlement, which found that HealthMarkets was negligent in both front- and back-end issues – including agent training and disclosure to consumers, as well as the handling of claims and complaints.
In order to avoid another $10 million in fines, HealthMarkets has to make some major changes, including creating a website that spells out the details of their policies and provides information on how to go about filing a grievance. This is standard practice for every other health insurance company – the health insurance carriers we work with in Colorado have had detailed websites for years. I guess it’s a little harder to set up an informative website when you’re trying to keep the fine print under wraps. I honestly hope that this latest fine will put HealthMarkets on a new course, with full disclosure and adequate coverage at the top of their priority list. Only time will tell.
