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Sunday, May 26, 2024 | Back issues
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AG Says Bogus Insurers Prey on the Elderly

MINNEAPOLIS (CN) - Two bogus health insurers prey upon the elderly by selling useless discount plans they falsely tout as health insurance, Minnesota says. Attorney General Lori Swanson says the Consumer Health Benefits Association and Home Health America lied about their services and refused to pay refunds after customers realized they had been deceived.

Swanson sued the Consumer Health Benefits Association in Hennepin County Court, Minneapolis, and Home Health America in Ramsey County, St. Paul.

Swanson says Missouri-based Consumer Health Benefits sold a health insurance plan it claimed covered 80 percent of medical expenses with small copays and had a "vast network of doctors and hospitals." In reality, its "health discount plan" offered 30 percent savings at best and had a limited number of providers, the state says. Consumer Health did not actually make payments to providers, as it implied to consumers during the sales calls, the state says. Consumer Health charged an enrollment fee of $129.95, a first-month payment of $129.95 to $149.95, which it refused to refund after customers realized they had not actually purchased insurance, Swanson says.

Nevada-based Home Health and its owner Mike Woodward sought out elderly victims via mail and advertisements to sell them purported around-the-clock, long-term home care services, for $3,000 to $4,000, the state says.

Woodward promised some victims 1 year of care, and guaranteed others lifetime care, Swanson says.

Woodward, who called himself "Mr. Woods," often ignored victims who called to obtain services, or simply contracted out services up to the cost of the plan, which usually paid for only a few months, Swanson said. Home Health did not actually provide the services it sold and did not have a relationship with care providers, as Woodward claimed on his Web site, the state says.

One of Woodward's victims, a 90-year old retired Minnesota deputy attorney general, paid Woodward $3,500, believing he had purchased a "special offer for Minnesota state employees," after he received a letter from Woodward that began with "Dear Retiree," Swanson says. This man got a refund - but only after contacting the state. Woodward had his Oregon and Washington insurance licenses revoked for dishonest conduct, and Home Health is not licensed in Minnesota to provide long term care cover to seniors, according to the complaint.

The state seeks injunctions, restitution and civil penalties for consumer fraud and deceptive trade.

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