Health Insurer HealthMarkets to pay $20M settlement over violations

July 22, 2008 by
Filed under: Americas, Finance, Government, Healthcare, Insurance 

HealthMarkets, a health insurer focused on individual policies, agreed this week to pay $20 million to settle violations of insurance rules in 36 states. The fine, one of the largest of its kind, follows fines already imposed by at least seven states and lawsuits from dozens of policyholders.

Between 2000 and 2005, a handful of state regulators have been investigating the company, concerned about its communications with customers. The regulators found that HealthMarkets wasn’t training its sales agents properly, and the agents, in turn, weren’t always fully disclosing the policies’ limits to consumers. What’s more, the investigators concluded that the health plan didn’t always promptly pay for medical services.

Under the terms of the agreement, HealthMarkets need not review complaints or issue refunds, but it must establish a toll-free hotline for members who bought coverage before August 2005. The line will offer such consumers additional information about their coverage. If it doesn’t correct its practices, it could face additional fines of up to $10 million.

To learn more about the settlement:
– read this Kaiser Daily Health Policy Report item
– read the HealthMarkets press release

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