36 States Launch Investigation Into Limited-Benefit Plans
Insurance regulators in 36 states led by Alaska and Washington have launched an investigation into limited-benefit health plans offered by HealthMarkets, USA Today reports.
HealthMarkets, which has 650,000 members in 44 states, has received fines from insurance regulators in seven states and has faced lawsuits from dozens of members since 2002.
In addition, Massachusetts Attorney General Martha Coakley (D) on Aug. 22 filed a lawsuit against HealthMarkets that alleges "deception and unfair practices." State insurance regulators have investigated other health insurers that offer limited-benefit health plans, often because of concerns that the companies misled consumers about the level of coverage provided by the plans. However, "no other health insurer has had the kind of multistate scrutiny HealthMarkets faces," USA Today reports.
Leslie Krier, an insurance regulator in Washington who has led the investigation, said that regulators have examined a number of HealthMarkets practices "brought to our attention as ... problematic in many jurisdictions."
According to USA Today, the results of the investigation, expected this fall, could have "far-reaching effects" on HealthMarkets and could "set an example for other insurers competing for a growing market" for limited-benefit health plans.
Mila Kofman of the Georgetown University Health Policy Institute said, "Other insurers want to know what state regulators perceive as problems and look at whether they are engaged" in similar practices.
HealthMarkets CEO William Gedwed said that the investigation has provided a "tremendous benefit" to HealthMarkets, which received a draft version of the results on July 31. He said, "A lot of the things they will recommend to us have already been implemented," adding, "We have a strong commitment to consumers and regulators as we go forward" (Appleby, USA Today, 9/5).