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Saturday, May 18, 2024 | Back issues
Courthouse News Service Courthouse News Service

‘Health Insurer’ Up to Old Tricks, Woman Says

PENSACOLA, Fla. (CN) - A woman says she was left with a septic kidney stone and a pile of unpaid bills after she was duped into buying worthless medical insurance, and that the company that sold it to her had just settled a class action that accused it of doing what it continues to do. She sued Healthmarkets and its subsidiaries, including The Mega Life and Health Insurance Co. and Americans for Financial Security, in Federal Court.

Sandra Means claims she was victimized by the defendants' "elaborate and fraudulent nationwide marketing scheme ... to sell medical insurance. Defendants prey on individual consumers and small business owners who work hard to make ends meet and who cope with difficulties in obtaining quality medical insurance at affordable prices."

Means says she was roped into it by Americans for Financial Security, which is controlled by Healthmarkets. She also sued Specialized Association Services Ltd., and a John Doe insurance agent.

Means says American's John Doe agent pitched the policy to her at her home in 2005, and did not mention the intertwined nature of the defendants.

"Doe promised that the American-endorsed policy underwritten by Mega Life was a major medical policy that would pay up to $1 million after only a small deductible," the complaint states.

"Doe promised this was possible as defendants had special contractual relationships with medical providers requiring them to accept, as payment in full, payments made by defendants. This was untrue. In truth, the policy was a limited policy paying limited benefits," and there were no such "special contractual relationships," Means says.

The complaint continues: "The sales pitch that plaintiff fell for is the same sales pitch more than 100,000 U.S. insurance consumers have fallen for in joining American, and paying membership fees, in order to obtain so-called negotiated affordable group rates on medical insurance. Defendants settled a class action that encompasses persons who purchased insurance from Aug. 1, 1998 to May 14, 2004. However, defendants continue the same wrongful acts and still fail to properly disclose the relationship between defendants."

The complaint claims this "illegal and fraudulent marketing scheme" is pushed nationwide with "a multimillion-dollar marketing campaign".

She seeks punitive damages for fraud, breach of contract, breach of faith, negligent misrepresentation, and intentional misrepresentation, and asks leave amend the complaint as a class action.

She is represented by Renee Baggett with Aylstock, Witkin, Kreis, & Overholtz.

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