Friday, November 21, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Lawsuit targets ‘junk’ health insurance

elias column sig

By
From page A11 | January 02, 2013 |

Dr. Norman Carter and his wife Kathleen are not alone, and a lawsuit they are fighting now in San Bernardino County Superior Court might help hundreds of other Californians who also believe they’ve been scammed by companies selling what lawyers often call “junk health insurance.”

Carter, 63, an independent orthodontist practicing in Chino since 1976, and his dental hygienist wife bought their $400-per-month individual policy from Mid-West National Life Insurance Co. of Tennessee in 2004, switching over from Blue Cross, which they believed was becoming too expensive. Besides their practices, both also taught at Loma Linda University.

Like many of the self-employed, all they wanted was comprehensive hospitalization coverage in case of a major illness. A high deductible was fine with them, so long as the lifetime cap on expenses was at least $1 million.

But, their lawsuit charges, what they bought into was a fraud. For their policy contained ambiguous language that set a limit of $18,000 for miscellaneous hospital expenses. When crunch time arrived for the Carters, their suit charges, Mid-West used that language to classify almost anything done in a hospital as miscellaneous. The Carters contend they weren’t told this could happen when a Mid-West agent sold them the policy.

Their lawsuit contends that when Kathleen Carter, also 63, needed surgery and chemotherapy for primary peritoneal cancer in early 2011, Mid-West paid only about $30,000 out of almost $200,000 in bills, the couple today still owing Loma Linda more than $140,000.

The suit says Mid-West accomplished this mostly with that “miscellaneous” tag. Among doctor-prescribed items placed under this label were $49,660 in operating room charges, $28,300 for anesthesia used during an eight-hour surgery and $24,381 in prescription drugs.

The Carter’s lawyer, Claremont-based William Shernoff, calls this a combination of fraud, breach of contract and “breach of the covenant of good faith and fair dealing.” His action does not seek a specific amount of damages, instead asking a jury to penalize Mid-West and its parent company, Texas-based HealthMarkets Inc., enough to discourage them and other insurance companies from doing anything similar.

For sure, it takes a huge penalty to discourage the type of scam alleged here. As recently as 2008, HealthMarkets (owned mostly by the New York-based Blackstone Group and the Goldman Sachs investment bank) agreed to a $20 million settlement with insurance regulators in an action begun by the Massachusetts attorney general. Three years later, the firm was forced to pay another $350,000 in penalties.

HealthMarkets, Mid-West Life and two sister companies are also now being sued by the Los Angeles city attorney for “unlawful, unfair and fraudulent” insurance sales and advertising. Among other claims, the city’s lawsuit says HealthMarkets’ agents were deliberately trained to defraud customers by not explaining all the limits on their policies.

How widespread is this type of practice? The state Department of Insurance reports it received more than 100 complaints about Mid-West Life from policy holders who claimed their legitimate claims were denied or massively reduced. And that’s just from one company. Several others – the department wouldn’t name them – supposedly perform similarly.

HealthMarkets refused either to comment on the lawsuit or to say how many policies it writes in California, saying that information is private. But it reported collecting $73.6 million in premiums here last year. If the Carters’ premiums are close to typical, that would mean somewhere between 10,000 and 15,000 California individuals and families have such “coverage.”

“These companies used to do this even more than they do now,” said Shernoff, whose firm has won hundreds of millions of dollars in settlements from insurance firms. “But once they paid that $20 million fine and were also banned for a year from selling policies in Massachusetts, they improved a little.”

Shernoff said he has settled 10 cases similar to the Carters’ in the last five years and estimates there were hundreds of instances like the theirs in California during that time.

No one knows if this will all end when the state health insurance exchange created under the federal Affordable Care Act, better known as Obamacare, begins operating in 2014.

“We can’t speculate on that,” says insurance department spokesman Byron Tucker. “We don’t yet know what companies will sell insurance there and we don’t know how they’ll be regulated and which ones will be eligible.”

All of which means this remains a classic case of “caveat emptor” – let the buyer beware. If an insurance agent won’t answer every question asked, if a policy is written so ambiguously it might allow an insurer to weasel out of most reasonable and customary expenses, it’s probably best to seek elsewhere for coverage.

Thomas Elias is a California author. Reach him at tdelias@aol.com.

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

.

Solano News

 
Fairfield on film celebration set Saturday

By Amy Maginnis-Honey | From Page: B1

 
Solano high school students bring robotics to Shanghai, China

By Susan Winlow | From Page: A1 | Gallery

Hanukkah Festival added to Holiday in the Park

By Amy Maginnis-Honey | From Page: B1, 1 Comment

 
Holidays present seasonal entertainment

By Amy Maginnis-Honey | From Page: B1

Memories of Thanksgiving Days gone by

By Tony Wade | From Page: A2

 
Man shot at Suisun City apartment

By Ryan McCarthy | From Page: A3, 6 Comments

 
 
Fairfield police log: Nov. 19, 2014

By Susan Hiland | From Page: A12

Suisun City police log: Nov. 19, 2014

By Susan Hiland | From Page: A12

 
.

US / World

Emotions rise as people hear immigration plan

By The Associated Press | From Page: A1

 
Obama spurns GOP with expansive immigration orders

By The Associated Press | From Page: A1, 11 Comments

Congress can’t ‘de-fund’ Obama on immigration

By The Associated Press | From Page: A1, 1 Comment

 
A look at the numbers in Obama’s immigration plan

By The Associated Press | From Page: A1, 1 Comment

California sheriff criticizes Obama on immigration

By The Associated Press | From Page: A3, 3 Comments

 
PG&E fined over alleged secret dealings

By The Associated Press | From Page: A4

Deal divides billions in closed nuke plant’s costs

By The Associated Press | From Page: A4

 
California tuition hike fight shifts to Sacramento

By The Associated Press | From Page: A4

Feinstein: Drought relief bill out for this year

By The Associated Press | From Page: A5, 1 Comment

 
GOP’s success in House races ends in California

By The Associated Press | From Page: A5, 1 Comment

Insurance sign-ups outpacing first year enrollment

By The Associated Press | From Page: A5

 
Man who killed co-worker, cut out heart released

By The Associated Press | From Page: A5, 3 Comments

St. Louis region prepares for Ferguson decision

By The Associated Press | From Page: A6

 
Union: Ferguson officer does not expect charges

By The Associated Press | From Page: A6, 2 Comments

NOAA: Globe sets 5th hottest-month record of 2014

By The Associated Press | From Page: A7

 
Roofs collapse as New York clobbered by more snow

By The Associated Press | From Page: A7

Hearing draws apology, admission in air bag mess

By The Associated Press | From Page: A7

 
Florida State shooter was well-liked but troubled

By The Associated Press | From Page: A7

Officials downplay debates over Ebola aid response

By The Associated Press | From Page: A7

 
Boko Haram said to kill about 45 people in Nigeria

By The Associated Press | From Page: A10

Israeli mayor’s ban on Arab workers ignites uproar

By The Associated Press | From Page: A10

 
Protesters, police clash in Mexico before marches

By The Associated Press | From Page: A10

Egypt acquits doctor in female genital mutilation

By The Associated Press | From Page: A10

 
Slain beauty queen, sister buried in Honduras

By The Associated Press | From Page: A10

.

Opinion

Why are we still changing clock times?

By Letter to the Editor | From Page: A11, 17 Comments

 
Editorial Cartoons: Nov. 21, 2014

By Daily Republic staff | From Page: A11

 
Thank you to businesses that support veterans

By Letter to the Editor | From Page: A11

 
 
Thank you for saving my purse

By Letter to the Editor | From Page: A11, 1 Comment

.

Living

Today in History: Nov. 21, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Nov. 21, 2014

By Susan Hiland | From Page: A2

I have several part-time jobs and have no time or money for a personal life

By Kathy Mitchell and Marcy Sugar | From Page: A9

 
Horoscopes: Nov. 21, 2014

By Holiday Mathis | From Page: A9

.

Entertainment

Week in preview Nov. 21-27, 2014

By Amy Maginnis-Honey | From Page: B1

 
Mike Nichols, crafter of films, plays, dies at 83

By The Associated Press | From Page: B2

Hollywood pays tribute to Mike Nichols

By The Associated Press | From Page: B2

 
Five memorable movies from Mike Nichols

By The Associated Press | From Page: B2

Highlights from Mike Nichols’ multi-genre career

By The Associated Press | From Page: B2

 
Handler apologizes for watermelon joke at awards

By The Associated Press | From Page: B3

O’Keeffe painting sells for record $44.4M in NYC

By The Associated Press | From Page: B3

 
TV Land pulls ‘Cosby Show’ from lineup

By The Associated Press | From Page: B3, 1 Comment

Mysterious sculpture recovered from River Seine

By The Associated Press | From Page: B3

 
Review: Revolution gathering in ‘Mockingjay

By The Associated Press | From Page: B3

Entertainment calendar Nov. 21, 2014

By Susan Hiland | From Page: B4

 
How a ‘tiny hamster’ video gets made

By The Washington Post | From Page: B5

TVGrid

By Daily Republic Syndicated Content | From Page: B6

 
James Nesbitt as a father whose child disappears

By The Associated Press | From Page: B6

.

Sports

Bulldogs, Wildcats into SJS quarterfinals

By Paul Farmer | From Page: B7

 
Raiders snap 16-game skid with 24-20 win vs. KC

By The Associated Press | From Page: B7 | Gallery

 
Giants confident they’re in Pablo Sandoval chase

By The Associated Press | From Page: B7

Intense Boldin keeps making big catches for 49ers

By The Associated Press | From Page: B7

 
Lewis in range of big prize at Tour Championship

By The Associated Press | From Page: B8

Hendrick gives Kahne 3-year contract extension

By The Associated Press | From Page: B8

 
NASCAR: Johnson says Harvick was correct winner

By The Associated Press | From Page: B8

Jared Goff growing into role of Cal’s ‘Golden Boy’

By The Associated Press | From Page: B8

 
JC volleyball: Falcons have 4 players earn all-BVC honors

By Daily Republic staff | From Page: B8

Manfred given 5-year term as baseball commissioner

By The Associated Press | From Page: B8

 
Bills’ home game against Jets relocated to Detroit

By The Associated Press | From Page: B8

AP source: Bermuda to host 2017 America’s Cup

By The Associated Press | From Page: B8

 
FIFA to review World Cup corruption report

By The Associated Press | From Page: B8

Union appeals Adrian Peterson’s suspension

By The Associated Press | From Page: B8

 
This week in sports history for Friday, Nov. 21, 2014

By The Associated Press | From Page: B9

 
Bjugstad leads Panthers to 3-2 SO win over Sharks

By The Associated Press | From Page: B10

Prep football capsules: Week 12

By Paul Farmer | From Page: B10

 
Cousins, Gay lead Kings past Bulls, 103-88

By The Associated Press | From Page: B10

.

Business

LaCrosse rides Buick’s high reliability rating

By Ann M. Job | From Page: C1

 
Ford gets the aluminum F-150 ready for prime time

By The Associated Press | From Page: C2

Country of origin label for meat cuts endangered

By The Associated Press | From Page: B11

 
Polls: Employers still prioritize health coverage

By The Associated Press | From Page: B11

New Mexico lawmakers grill spaceport boss

By The Associated Press | From Page: B11

 
Family gets $6.75 million in Botox treatment case

By The Associated Press | From Page: B11

Gap names heads of namesake brand, Banana Republic

By The Associated Press | From Page: B11

 
AT&T pays $23.8 M to settle hazardous-waste case

By The Associated Press | From Page: B11

Soaring generic drug prices draw Senate scrutiny

By The Associated Press | From Page: B11

 
US home sales rise in October

By The Associated Press | From Page: B11

US unemployment aid applications fall to 291,000

By The Associated Press | From Page: B11

 
.

Obituaries

.

Comics

Sally Forth

By Daily Republic Syndicated Content | From Page: A8

 
B.C.

By Daily Republic Syndicated Content | From Page: A8

Baldo

By Daily Republic Syndicated Content | From Page: A8

 
Wizard of Id

By Daily Republic Syndicated Content | From Page: A8

Zits

By Daily Republic Syndicated Content | From Page: A8

 
Garfield

By Daily Republic Syndicated Content | From Page: A8

Frank and Ernest

By Daily Republic Syndicated Content | From Page: A8

 
Pickles

By Daily Republic Syndicated Content | From Page: A8

Beetle Bailey

By Daily Republic Syndicated Content | From Page: A8

 
Baby Blues

By Daily Republic Syndicated Content | From Page: A8

Blondie

By Daily Republic Syndicated Content | From Page: A8

 
Peanuts

By Daily Republic Syndicated Content | From Page: A8

Dilbert

By Daily Republic Syndicated Content | From Page: A8

 
Get Fuzzy

By Daily Republic Syndicated Content | From Page: A8

For Better or Worse

By Daily Republic Syndicated Content | From Page: A8

 
Rose is Rose

By Daily Republic Syndicated Content | From Page: A8

Sudoku

By Daily Republic Syndicated Content | From Page: A9

 
Cryptoquote

By Daily Republic Syndicated Content | From Page: A9

Bridge

By Daily Republic Syndicated Content | From Page: A9

 
Crossword

By Daily Republic Syndicated Content | From Page: A9