LOS ANGELES (CN) - Healthmarkets Inc. defrauded more than 100,000 consumers it sold health insurance policies by offering them affordable group rates but concealing its control of the only firms it endorses, co-defendants Mid-West National Life Insurance Company of Tennessee, The Alliance for Affordable Services, and Specialized Association Services, a class-action complaint claims in Superior Court.
Lead plaintiff Bonnie Parco claims the defendants settled a class-action lawsuit making similar allegations for the period Aug. 1, 1998 to May 14, 2004, but that the "Defendants continue to maintain this fraudulent marketing scheme."
Also sued Elizabeth Soloman, who allegedly sold Parco a $1 million policy. Parco claims that when she filed a claim, "Mid-West advised that it intended to rescind based on post-claim underwriting, which is prohibited in California".
Parco claims, "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 Alliance, and paying membership fees, in order to obtain so-called negotiated affordable group rates on medical insurance."
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.