HealthMarkets Agrees To Pay Delaware as Much as $500,000 Fine
Texas-based health insurer HealthMarkets has agreed to pay as much as a $500,000 fine to resolve allegations of improper business practices in Delaware, according to the terms of an 18-page settlement released on Wednesday, USA Today reports. HealthMarkets, which has 650,000 members in 44 states, faces a separate investigation by 36 states and a lawsuit filed by the Massachusetts attorney general. In addition, HealthMarkets has received fines from insurance regulators in seven states and has faced lawsuits from dozens of members since 2002 (Appleby, USA Today, 10/11).
In a report released in May, Delaware insurance regulators alleged that HealthMarkets between 2002 and 2004:
- Enrolled some policyholders in individual plans, although under state law they qualified for small-group plans, which cost less and provide more benefits;
- Directed customer service representatives to discourage written complaints from policyholders; and
- Failed to provide benefits for mental health care and childhood immunizations as required by state law (USA Today graphic, 10/11).
Under the settlement, HealthMarkets, whose subsidiaries include Mega Life and Mid-West National, could reduce the amount of the fine to $100,000, provided that the company meets certain conditions. In a written statement, HealthMarkets officials said that the company has complied with many of the conditions and does not expect to pay more than a $100,000 fine.
HealthMarkets has "proactively implemented and continues to implement a wide range of changes and improvements designed to enhance customer service, customer education and agent training," company officials said. Among other conditions, the settlement requires HealthMarkets to review all policy cancellations and denied applications since 2002, as well as a sample of denied claims from that period. HealthMarkets must make restitution in the event that the review finds improper cancellations or denials. Delaware Insurance Commissioner Matt Denn said that HealthMarkets might have to pay more than a $100,000 fine. He said, "They have a long way to go (to meet the terms of the settlement)," adding, "They certainly haven't done everything" (USA Today, 10/11). This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
