Martha Coakley, Attorney General of the US state
of Massachusetts, has fired a broadside at MEGA Life and Health
Insurance, Mid-West National Life Insurance and their parent
company, HealthMarkets Inc (HMI), alleging in a complaint that they
have engaged in unfair and deceptive trade practices.
“Our complaint alleges that MEGA and Mid-West
routinely mislead people about the benefits in their health
insurance policies,” said Coakley. “These companies targeted
individuals and small businesses looking for low cost health
insurance, but the coverage they provide is not what MEGA and
Mid-West’s advertising and sales agents make it out to be, and it
falls far short of what the law requires.”
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Specifically, the lawsuit alleges that the companies violated state
law by misrepresenting the provisions of their policies, failing to
cover health benefits and services required by law, disclosing
personal health information about insured consumers to third
parties and illegally requiring self-employed individuals and small
businesses to pay fees to join associations to gain access to small
group insurance.
Coakley’s action seeks to stop the alleged unlawful practices,
require MEGA and Mid-West to pay refunds and restitution to harmed
Massachusetts residents and substantial civil penalties and costs
to the state.
In the year to 31 December 2005 (the latest figures available), HMI
reported revenue of $2.121 billion, $1.86 billion from health
insurance premiums.
