ORLANDO (CN) – Healthmarkets and Mega Life & Health Insurance Co. “prey on” people and small businesses in an “elaborate and fraudulent marketing scheme … to sell medical insurance,” by claiming to have group purchasing power, without revealing that the “group” consists entirely of their wholly owned subsidiaries, according to a complaint in Seminole County Court. Plaintiffs say that “despite settling a class action lawsuit, Defendants continue to maintain this fraudulent marketing scheme.”
Parents suing on behalf of their children reserve the right to make this a class action. They also sued Americans For Financial Security, Specialized Association Services LTD, and insurance agent Kathleen Miller.
Plaintiffs say the defendants pitch their services by claiming that customers “become members of a large group that enjoys true buying power. The major benefit promised by American is the ability to purchase America’s ‘endorsed’ medical insurance at affordable group rates. American ‘endorses’ Mega Life insurance plans on behalf of American members. Plaintiff and other insurance consumers are never told the truth that, in reality, American is controlled by Healthmarkets and the only medical insurance American endorses is that of Mega Life, Mid-West National Life Insurance Company of Tennessee, The Chesapeake Life Insurance Company, all of which are wholly owned subsidiaries of Healthmarkets.”
The complaint states: “Plaintiffs were not members of a previous class action that encompassed only persons who purchased insurance from Defendants between August 1, 1998 and May 14, 2004. Despite settling a class action lawsuit, Defendants continue to maintain this fraudulent marketing scheme.”
Plaintiffs demand punitive damages. They are represented by Daniel Thornburgh with Aylstock, Witkin, Kreis of Pensacola.