Lawsuit Alleges Insurer Misled Calif. Couple About Coverage
On Wednesday, a trial begins for Texas-based insurer HealthMarkets over allegations that it misled a San Bernardino County couple into buying a policy that left them with more than $140,000 in unpaid medical bills following cancer treatment, the Los Angeles Times reports.
In 2008, HealthMarkets paid $20 million to settle an investigation involving California and 47 other states that accused it of deceptive business practices. The insurer also paid $17 million in 2009 to resolve similar allegations filed by the Massachusetts attorney general. It was banned from selling health plans in the state for five years.
In addition, HealthMarkets was sued in 2010 by the Los Angeles city attorney's office over allegations of unfair business practices. No trial date has been set for the case.
Details of Current Case
In August 2011, the couple -- Kathleen and Norman Carter -- sued a unit of HealthMarkets in San Bernardino Superior Court for fraud and breach of contract, alleging that the insurer deliberately misrepresented the benefits of the health plan.
A spokesperson for HealthMarkets declined to comment on theÂ pending litigation.
According to the Times, the case highlights struggles that many consumers face when trying to understand health plans' coverage details.
The Affordable Care Act includes rules that seek to prevent insurers from selling policies with confusing exclusions that can leave individuals with large, unforeseen medical expenses.William Shernoff -- a lawyer representing the Carters -- said the ACA's regulations are needed to protect consumers. He said, "People may think they have good coverage, and it may be too late when they find out that's not the case" (Terhune, Los Angeles Times, 11/24). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.