This report originally appeared in the December 2009 issue of DOTmed Business News
Minnesota Attorney General Lori Swanson has filed two lawsuits against separate companies for scamming Minnesota citizens into believing they were purchasing health coverage at an affordable price when the persons were actually purchasing non-insurance products with limited benefits. "Many people are struggling with skyrocketing health insurance premiums. Some companies are exploiting the lack of affordable health coverage by aggressively promoting risky, unregulated health coverage products that offer little or no financial protection if you get sick," Swanson said.
In the first case, the lawsuit alleges that Consumer Health Benefits Association aggressively telemarketed citizens for discount health plan claiming to be the same as or like health insurance. However, CHBA is actually a "health discount plan" and does not provide insurance coverage or cover claims, but instead offers certain discounts off the "retail price" charged by certain doctors and clinics. The company then charged the enrollees fees in excess of $250, and only afterwards sent materials regarding its plans.
In the second case, Home Health America, LLC allegedly offered long-term and home care benefits to elderly citizens without being licensed as an insurance company. Defendant Michael Woodward met with seniors and indicated Home Health America would provide home care and other long term care services in exchange for a lump sum payment of up to $4,000. After making their payments, Minnesota seniors received letters stating that their program had been "upgraded" to include medical services such as 24 hour nursing care and assisted living care. In some cases, Home Health America refused to even pay claims.
