Personal Injury Law

Health Insurer MIsleading Practices Exposed

A health insurer which sells policies in Georgia and other states has been subjected to a major fine and other sanctions by the state of New York, after New York officials accused it of leaving patients with huge hospital bills.

The American Medical and Life Insurance Co., advertising through an intermediary called Cinergy, markets health insurance as a lower cost option for the uninsured and underinsured. It was pitched as costing just $5 a day, or the cost of a hamburger or pack of cigarettes.
In one TV ad, the narrator said the insurance is available "regardless of any pre-existing conditions," while the print on the screen stated "most pre-existing conditions accepted" and the fine print stated there is a six-month waiting period.

As a result of the New York action, the company must stop running the national ads and pay a fine of $700,000 .

New York?s Acting Insurance Superintendent said Wednesday that the cases uncovered in New York's two-year investigation included a Rochester woman who had $419 a month charged to her credit card for the insurance, only to have the company cover just $1,164 of her $28,000 hospitalization. A 36-year-old New Yorker who had a stroke found his policy covered just $250, leaving him with a bill for $29,917. In both cases, the company paid off the balances after the state intervened.

The New York City-based company sells policies in 38 other states, including Georgia, and the District of Columbia. It sold about 12,000 policies in New York, about 5,000 of which have lapsed, and about 38,000 nationwide.

New York is also prohibiting the company from selling its partial coverage policies in New York, in part because state officials said the company failed to fully disclose the extent of coverage or use licensed agents as required.

Full post as published by Georgia Injury Lawyer Blog on August 15, 2009 (boomark / email).