Thursday, March 25, 2010

TN officials seize offices of alleged multi-state illegal health insurance operation

The Tennessean is reporting that state insurance regulators this morning took control of two companies we've been warning Washington consumers about for months:

From the paper:
State insurance regulators today took control of two Robertson County companies that have been accused of selling illegal health insurance policies to thousands of consumers nationwide.

The Tennessee Department of Commerce and Insurance appeared to be in control this morning of the Springfield offices of Smart Data Solutions LLC and American Trade Association. The companies have been accused by insurance regulators in at least 20 states of selling bogus health insurance policies to unspecting consumers nationwide.
Tennessee officials, the paper reports, are asking a court to put the businesses into receivership.

Here in Washington, we're well acquainted with these companies. In January, we issued this cease and desist order against them, ordering them to stop selling illegal health insurance products here.

We know of at least 70 Washingtonians who bought such coverage. Some have reported problems with delayed or unpaid claims. Nationwide, more than 10,000 consumers are believed to have purchased such coverage at a cost last year of more than $14 million.

Many insurers, as a condition of doing business here, are required to file a lot of information with us: their financial reports, copies of their policies, sales data, etc. This allows the state to ensure that insurers are able to make good on their promises, and helps us protect consumers from getting ripped off.

If you live in Washington and have purchased this coverage, please call our consumer hotline at 1-800-562-6900.

Kreidler re: health insurance mandate: "I think personal responsibility is an important thing"

Washington state Insurance Commissioner Mike Kreidler this week was interviewed by TVW's Austin Jenkins on the new federal health reform legislation.

Among the topics: the mandate, starting in 2014, requiring people to have coverage or to pay fine.

From Kreidler:

"Clearly there are costs that are borne in the system, but there are also benefits that are generated from them, not the least of which is when you end up having an individual mandate.

 ...There's personal responsibility. I think personal responsbility's an important thing.

If you choose not to have health insurance, and you say `I don't want to buy insurance, I shouldn't be told that I have to buy it' and yet you wind up with a traumatic injury or you're diagnosed with cancer or you're admitted to the hospital -- you're effectively incurring costs that then are pushed back on the rest of us.

I have to write a check then for you to cover you. It's built into my premiums. It's added to my costs.

For a family of four that is insured it's estimated by the Kaiser Family Foundation that in fact you are writing a check of $1,000 a year to pick up the people without health insurance."

Recession fuels health insurance scams

Public radio's KPLU did a great story recently: "Recession fuels health insurance scams."

Full disclosure: the story's based on info from our office, so yes, we're kind of touting ourselves here. Still, the story's a good summary of how questionable health insurance markets itself and what to watch out for.

Read or listen to it here.