OH & KS Consumers Sue Insurance Company Over Flimsy Plans

By Consumers For Quality Care, on June 26, 2019

After her divorce in 2016, Ohioan Elizabeth Belin shopped around for an ACA plan. Belin says she spoke to a broker who told her he would find a plan that fit her budget. Belin was not told, however, that the plan she purchased was actually a plan with limited coverage, The New York Times reports.

Belin only found out the truth about her policy after knee replacement surgery. After paying $240 per month for her health insurance, the insurance company, Health Insurance Innovations, said that the surgery would not be covered. The surgery left Belin with $48,000 in medical bills, a total higher than her annual income. The high cost left her unable to get the procedure on her second knee.

Like Belin, Christopher Mitchell, from Kansas, only found out he was not fully insured after Health Insurance Innovations denied coverage for a surgery related to his recent cancer diagnosis. Now, the two have filed a lawsuit against the Florida-based company. According to the suit, the insurer misled them about the coverage they purchased. Both individuals believed that they were buying comprehensive coverage that met ACA standards.

At the news conference on Wednesday, [Elizabeth] Belin and Christopher Mitchell, the plaintiffs in the lawsuit, said they had no idea they were buying junk insurance.

The suit comes amidst changes by the federal government to make cheaper, skimpier coverage more widely available. Critics of the plans, like the National Alliance on Mental Illness, are suing the administration over the changes.

Consumer advocates warn that consumers, like Belin and Mitchell, often sign up for short-term limited-duration plans without understanding that they do not offer full coverage. California, Massachusetts, New Jersey and New York have gone so far to ban the sale of short-term limited-duration plans.

“This isn’t real insurance,” said Jason Kellogg, one of the lawyers representing the individuals in the Florida case. They are seeking class-action status, estimating that as many as 500,000 people may have bought these policies.

Health Insurance Innovations has also been tied to the health insurance brokerage company Simple Health, which was recently shut down by the Federal Trade Commission after regulators said it was engaging in “a classic bait and switch scheme.” The lawsuit alleges that Health Insurance Innovations was complicit in Simple Health’s brokers misleading consumers about their coverage.

Health Insurance Innovations says that Simple Health deceived them as well. It says it will fight the lawsuit, which has “no merit” according to the company.

But Mr. Mitchell says his experience should serve as a cautionary tale to those shopping for their own policies. “This could happen to anyone,” he said. “People need to be aware of these scams.”