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FTC Cracks Down on Fake Health Plans

Cheryl Clark, for HealthLeaders Media, August 12, 2010

"As a result of the DMHC's action, HealthcareOne LLC (as the company is called in California) and its affiliates have ceased offering tehir products in California, but federal action by the FTC was essential to address the problem nationally," according to a statement issued by the DMHC.

In the third case, a U.S. district court temporarily halted deceptive actions of United States Benefits, LLC after the FTC and Tennessee Attorney General Robert E. Cooper Jr. charged the company with selling medical benefit plans disguised as major medical health insurance. The agency says it seeks a permanent ban on the practice.

"The telemarketers claimed that the plan was available to all—including consumers with pre-existing conditions—and provided medical coverage with no deductible and no waiting period.  But when consumers received written information from the company, they discovered that instead of health insurance, they had purchased membership in a 'benefits association' consisting of healthcare-related discounts with little or no value."

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