Is this what Blackstone, Credit Suisse & Goldman Sachs want said about their investment?
"The severity of their actions certainly warranted that level of penalty. They hurt a lot of people," says Washington Insurance Commissioner Mike Kreidler, whose state and Alaska led the investigation.
Today a group of insurance commissioners handed down a $20-million fine to parent company HealthMarkets for the behavior of Mega Life & Health, and also its corporate siblings Chesapeake Life and Great West
$20 million isn’t exactly a huge fine, and it doesn’t put HealthMarkets out of business. It’ll be interesting to see whether Mega changes the quasi-fraudulent structure of its benefit plans. After all, they’ve been ruled legal in California, and my sources tell me that the medical-loss ratio is around 30 percent.
My guess is that they know that eventually they can’t stay in business this way. So they face the choice of either changing the business completely to become more worthy and less profitable, or instead to try to bleed every last dollar out of their subscriber base and semi-trained sales team. I wonder which they’ll try.