Beware of Fraudulent Health Plans
This morning as I read the Sunday Huntsville Times before getting ready for church, I came across an article that reminded me of a prior case. I could not download the article from The Times website. However, a quick Google search of the listed author gave me the online access I needed. The article, about fraudulent health insurance plans, by Maura Lerner, detailed the sad story of a retiree left with over $50,000 in unpaid medical bills when his "health plan" would not pay for his medical care.
Most of us work for traditional employers who provide health insurance through well known companies or plans. However, many people, especially the self-employed and unemployed, cannot gain affordable access to standard plans. This leads them to seek alternative coverage.
For me, this article brought back the memory of a self-employed gentleman who sought affordable insurance coverage for himself and his wife. In his search, he saw an ad from a local insurance broker. The ad said to call for affordable health insurance. He did. The broker supplied him with a "health plan" sponsored by an "employee group" or union out of California. To obtain the coverage, he was required to join this union. He did so. After faithfully paying his premiums for a long period of time, he became ill with cancer. His bills exceeded $100,000 and the plan would not pay. Later, I interviewed one of his physicians who related that he had actually called the plan administrator about his unpaid bill and was simply informed that he had not been paid because the plan had not expected their participant to get sick.
Faced with these huge medical bills, he sought legal counsel. Several attorneys declined to help him because of the potential implications of ERISA, a Federal law which governs legitimate employer and union benefit plans. As most attorneys will tell you, ERISA places significant limitations on the potential recovery in these cases. However, ERISA does not apply to all health coverage and I knew it did not apply to his case. Eventually, after lengthy litigation, we were able to resolve successfully this case. Any person considering health insurance through some form of non-traditional coverage should by very careful in exploring their options. The financial impact of unpaid medical bills is far too devastating for the consumer to take this choice lightly.
