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HEALTH PLANS: Legal cons abound in health insurance

(Hat tip to Don McCanne). Apparently being a scummy insurance company and selling not-quite-fraudulent policies to dumb consumers is all fine and dandy—or at least legal. This is not the first or last we’ve head of this type of thing—a company called Mega Life and Health selling a cut rate policy via commission salesmen to unsuspecting punters. When something really bad happens the punter discovers that the policy is worth basically squat, and they owe $200K plus. The judge says this is America and you should have read the fine print. We all know that the best cons are the legal ones.

There’s a related category of insurers who pay out on small claims but dissapear completely when enough big ones come in. Jon Cohn’s soon to be published book will blow the lid of that bunch (I hope) so I won’t say much about them. But essentially these are all on a sliding scale from California Blue Cross cancelling coverage after the fact, to Golden Rule selling their underwritten products, to the con artists and outright fraudsters. And given the collapsing state of the employer insurance market, and the growth in desperation from people like the couple in this article, I guess it’s only a matter of time before these insurers become a bigger and bigger piece of the market and someone like United HealthGroup buys them.

And if Active Health Management is over on the Yin side of the health insurance world, these shysters are out there on the Yang end. There is a possible solution to the whole thing, but if the responsible heads in the insurer world won’t push for serious reform of their own industry, these kinds of stories will make a government run system much more likely. I suspect I’ll be saying “I told you so” in 2016 or thereabouts

CODA: I missed this at the time, but the (now fortunately dead) Shadegg bill would have aloowed the shysters at Mega and their ilk to do this everywhere, as PBS NOW reported. See the excellent transcript.

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  1. After many years of managing large organizations in the corporate world I started my own small business five years ago. I have struggled to offer a solid health care plan for my employees. We have had steady growth over the years, but not the cost of health care has grown even faster. Do you know of any states that offer a subsidized small business health care plan like Arkansas?

  2. After many years of managing large organizations in the corporate world I started my own small business five years ago. I have struggled to offer a solid health care plan for my employees. We have had steady growth over the years, but not the cost of health care has grown even faster. Do you know of any states that offer a subsidized small business health care plan like Arkansas?

  3. I was a top producer for the NASE/Mega Life and Health for several years before the ether wore off. The trips were great–it was exciting being part of the team, and I made a six figure income. Like ALL Mega Agents, this was my first health insurance sales gig (shouldn’t that have been a red flag?).
    Over time, like all Mega Agents, I found that we were offering watered down, inferior health insurance policies that paid very little if any claims. Never a maximum out-of-pocket maximum (check your brochures for that specific terminology–you won’t find it), high deductibles, high co-insurance, and if there were co-pays they had low limits (like everything else). We were trained to say that because our clients were now members of the NASE that they would only experience an industry low 8-10% rate increase annually. (Then why am I getting calls every day from my over 400 clients saying that they just got a huge rate increase between 15-40%?
    Over time, like all Mega Agents, I found that Mega was being sued left and right, getting kicked out of more progressive states, despite name changes and various shell games. How many of your clients have canceled after doing an internet search on Mega?
    Over time, like all Mega Agents, I saw the effects of the difference between the Mega advances and any other company’s commissions (advances are loans with interest you have to pay back) which put me, like all Mega Agents into debt.
    Over time, like all Mega Agents, I saw that my stock plan that was supposed to take care of my future retirement was a mirage. After three years and over $2 million in production I was vested with less than $10,000 in stock. So I would have to work at this pace for the next 100 years to retire a millionaire (a little different story than I was sold in orientation). That stock didn’t even cover my alleged debt to the company when I left.
    Over time, like all Mega Agents, I saw my bonuses whittle away instead of grow like they were supposed to. After Ron Jensen, the founder, passed away, the company made some changes. The REAP (production bonus) was changed to a QPC (production bonus). My production bonuses went from over $6,000 every other month, to under $1,500 every three months. That is a huge cut in pay. Not very motivating.
    Over time, like all Mega Agents, I found that I was driving all over the place at over $3.00 a gallon while independent brokers were making all their sales over the phone and internet.
    Over time, like all Mega Agents, I was forced to buy leads, even though I was producing more than ever before, because that was “expected” of senior agents.
    Over time, like all Mega Agents, I discovered that independent brokers were making three times as much money with none of the expenses.
    Over time, like all Mega Agents, I came to believe that there must be a better way. And I found it. If you would like to find a better way–a better way to make even more money, a better way to offer your clients more selection of the best health insurance options available in the marketplace, a better way to realize your dreams ethically, then please email me at exmegaagent@yahoo.com so we can talk.
    I can help you in several ways:
    1. I can assist you in forming an exit strategy. Don’t just get frustrated and quit! Big mistake! You deserve more!
    2. I can help you develop a plan to combat that bogus debt that Mega says you owe them. Do you think its fair that Mega is the most profitable insurance company in the world, while the whole time you made them that way and now you owe them money?
    3. I can point you in the right direction when it comes to who you should be working with and how to get contracted with them. With the companies I current work with, I make 3 times the commissions, I acquire zero debt, I get 60 quality internet leads a week FOR FREE, I am vested immediately 100% on my residuals which never go away, I don’t drive unless I want to, and I have total FREEDOM!
    Email me at exmegaagent@yahoo.com for more information. You owe it to clients, your family and yourself.

  4. I am a Mega agent and am happy that I am. So many times there are so many people that are driven by the negative news or just by anything that can be sensationalized by the media. How often do you hear about the good news? Rarely ever. I hear people bashing Mega and Health Markets about the plans they bought or what they think the company stands for. Why do you never hear anyone ever speak of the hundreds of thousands of dollars that Health Markets donates to charities and food pantries across the U.S.? Why do you never hear that their mission statement is one word…HOPE…and that it stands for Helping Other People Every Day? Why do you never hear about my coworker that stood behind a lady in line at an auto repair shop last winter that couldn’t afford to pay for the repairs to her car and he stepped forward and paid her bill for her and never asked for repayment? You know why you don’t hear about that?? Because it is a feel good story and it doesn’t throw gas on the fire of the grumpy people out there or the people that want to blame someone else for what happened to them versus shouldering some of the responsibility for what may have happened. It is always easier for people to blame the other guy than to accept responsibility for their actions.
    Every time there is a company that does well and does right there are always people or competitors out there that feel a need to build themselves or their products up by breaking others down before speaking of the merits of their own. Try making yourselves look good for what you do and for what you offer before you try and make yourself look good by making others look bad for what you claim they don’t offer or don’t do.
    I sell for Mega and Health Markets and am happy that I do. I don’t have to lie, cheat or steal to sell this product. It is a very easy product to explain and to market. Is it different from other insurance products out there? Sure, but that is what makes it different, good and heavily challenged by others that don’t offer it. I have been doing this for some time now and have not had one complaint from my customers about their policy. When they get their packet in the mail they open it and read it. When they read it they can see that it is exactly what was represented to them and exactly what they knew they were getting.
    Most people are unhappy with their insurance because they want to get 100% coverage and only pay $100 a month for a family of 5. Then when something happens where they have to pay a bill they get upset and cry “Fraud!!” or “I’ll sue!!” because they think they should get the best of everything for next to nothing.
    Are there bad agents out there? Sure, and no one has ever disputed that fact. My problem with this is that no matter who you are or what you are selling you will have good agents and not-so-good agents. Our company has a very good training program and no matter what anyone writes about (even ex-agents) I can tell you that no one is ever allowed to sell our product without a license. That is just narrow minded thinking by anyone who would say that. What do you think that each state’s insurance commission does?? You cannot sell without a license, no way, no how. All of our agents go through state licensing, company training and company testing before they can even think about selling. The first thing we learn after learning the product is that we are not out there in the market to take anyone away from a good situation. We are trained that if we cannot help them out or put them in a better position we are to walk away. If we can’t help them we do not want to hurt them. It is not all about the sale, it is about helping.
    One of the requirements of our company is that we cannot sell over the phone. We have to be face to face with clients and explain the product to them. Then we have to sign off with them on a form that sates we saw them face to face and explained everything about the insurance to them and did so to their satisfaction. The nay-sayers out there say that we do that so we can put the bite on them and pressure them into a sale. Well with all the identity theft and computer crimes out there these days I am not so sure I would be comfortable buying an insurance product over the phone or on the internet when all they ask for is a credit card number. Can you learn more about a policy and a company over the phone or on a web page or by sitting down with a real person that will speak with you and answer your questions directly?? Would you buy a car or a house over the phone or internet?? I don’t know about any of you but I know which route I would take. It is much easier to size up the person doing the selling when he or she is right there in your home or at your business presenting to you than it is to someone behind a desk churning out one policy after another.
    I hear stories of people that say their agent will not leave behind a brochure concerning the plans unless they purchase one. That is funny because those are approved marketing materials and what we have to present the plans from. They are present at every sale.
    The idea that the NASE is just a cover for us to sell insurance is ridiculous. Do those same people know that because of the way certain state laws are written that in some states they may have to be an NASE member to get the insurance product and in others they do not? It is not a scam it is just law in some states. Now why is the NASE such a bad thing? They provide benefits to self employed people that they could not get or afford to get on their own…I fail to see where that is bad. I am a member of the NASE and I also have our insurance. I use the benefits the NASE provides and I do save money as a small business owner. My clients use the benefits and tell me how much money they have saved and what a great organization it is. I recently had a new insurance customer purchase the insurance but would not do so until he asked more questions of another one of my clients that referred him to me. After speaking with the 3rd party he came back to me and said “sign me up”. When he spoke to his friend he was informed that he recently had knee surgery due to his work-related accident and that the insurance worked just as I had said it would and just how he expected it to. Incidentally, he is also now using the tax help and tax plan that we help set people up on at no charge and he is saving more money on his taxes than he ever knew he could. So to say that the NASE is a “front” for selling our insurance is plain bull.
    I am smart enough to know that there are two sides to every story. I just wish everyone else would see that also. For every negative story out there about our company or any other there are just as many positive ones. You just never hear about them because unfortunately it is the negative and slandered information that the general public feeds on.
    If you are looking at buying health insurance don’t be afraid to deal with anyone for anything…just be smart about how you do it. Ask the right questions and demand a satisfactory answer. No one is ever forcing anyone to buy the product. If it is explained to you and you don’t understand it have it explained until you do. No one is forcing anyone to sign anything. Make sure you get a business card from your agent that has all of their contact information on it. I guess the bottom line for me is that you should remember that there are two sides to every story and that things are never as good or as bad as they seem. Take the time to listen to your agent and feel them out as a person. As I said before there are bad agents out there for all companies but that doesn’t make us all bad or evil. There are plenty of us that want to help a person or family out and get them the protection that they need and that they can afford.
    The grass isn’t always greener on the other side but you still should check out what is one the other side and make the best decision for yourself versus reading something and letting someone you don’t even know make it for you.
    An Honest Agent

  5. Honest Abe…you are somewhat correct. However, the client shouldn’t need to sit down and go through the schedule page, they should already understand it. Mega / Mid-West agents are trained to ‘not’ leave a benefits guide. Why? I’m sure you can come up with your trained answer. But, in truth, it’s because the people buying the policy might read it. That would severly hurt sales.
    Quick question for all of you Mega / Mid-West agents: If your company is so darn awesome, then how come there aren’t flocks of ‘licensed’ agents running out to sell your products? UGA only goes after the non-licensed, in-experienced (in health insurance) people to sell these products. It’s no wonder that 92% of the agents that work with UGA quit every year. That’s right. Look around at your meetings and tell me how many were there a year ago.
    To all of the consumers out there, don’t blame the products for the lack of coverage. These products aren’t bad products unless they are put into the wrong situation. Most of you have the ‘perception’ that you are buying a Major Medical Policy. That’s not the case. Take your time…don’t rush into it…and read, read, read. If you have an agent that has some excuse why they can’t leave you an outline of coverage for the product they’ve quoted you (before you do the application), then they are trying to hide something.
    Peace out!

  6. I also work for Mega and Midwest. These are affordable options for people who need some coverage for the over inflated health care costs here in the US. The policies do not promise to cover anything at 100% and the problem is people buy them and never sit down to read the book when they receive it. The schedule page which is the easiest part of the book to read, clearly lists the maximums that are paid for each type of service. People would not buy a car or house without looking at it or reading the financial terms so why are they so irresponsible with their health policy? Don’t get me wrong I hear heartbreaking stories every day and I feel terrible about ill people suffering, but Mega is offering something still affordable to those who cannot get group policies. Please sit down and read your coverage before you do get that catastrophic illness and its too late. You are accountable for everything else in life, why not this?

  7. I am an independent agent who represents Mega and Midwest. I’m a fairly new insurance agent and got into the business because injuries have made it impossible to stay in my normal trade. I would hate for someone to sell me something under false pretenses and would not be able to live with myself doing it to someone else.
    I’ve researched the Mega and Midwest plans and honestly cannot find a lot of room for those companies to get out of paying what they say they will. The Mega plan for instance is a high or low deductible plan and then turns into a co-insurance of 70/30 until the insured has paid out of pocket 4500 dollars at which point the plan pays 100 percent of costs up to 1 million dollars per incident. There are riders which are in clear language which cover diagnostics, ER, physicians visits, cancer treatment and so on.
    I think the problem is that agents tell people they have more coverage than they actually have. My personal experience has been that I have NEVER been encouraged to make the plan appear better than it actually is. I personally would find it rather difficult to say one thing while the opposite is sitting there in print.
    It seems that 1 million dollars per incident is a lot of coverage for the premiums. I understand the cost of health care is extremely high and I wish it weren’t that way but it is what it is.
    Perhaps the Mega plan was flawed before I came aboard. It seems like nothing other than an agreement to pay a percentage of one’s medical bills in exchange for monthly premiums. The brochure is not some series of loopholes or half truths. I find it easy to navigate and most people I’ve shown it to have understood the print fairly well.
    It is not full coverage and makes no statements to the contrary. I truly feel bad for people who truly feel robbed by these plans but stories like these should tell people to see it with their own eyes.

  8. I have a Mega Health sales person coming over to my house “again” to re-discuss a Mega Health Plan which I just cannot seem to understand.
    I’m no expert on healthcare insurance and do not find it easy to shop for self employed healthcare.
    Some things that were explained to me by this Mega sales person, again and again, just do not make sense! The more I think about it, in the back of my head, I do not trust the plan and feel uneasy about it. The basic book they use to inform about thier plans just reads weird. It gets more confusing when the sales person talks about it. When I asked for more information in an attempt to read the “fine print” I was told “not till you sign up”. How does the buyer get the fine print if the sellers will not give that out right at the beginning of the process? The Mega person informed me that I could not have that type of information until I was approved for thier insurance,in which after wards I would be sent a packet to read. I find it strange also that if you goto the Mega Health Insurance web and NASE web sites you cannot get any info on thier plans,not even crumbs. You are to fill out a form to be contacted by a sales person because, as they say, insurance varies by state. Thanks for the info and the PBS video clip.

  9. What about the signature plan basic medical surgical expense policy offerred by Mega? Is that any better? What are its limitations?

  10. Mega Life sells mini med plans–indemnity policies which pay scheduled amounts for procedures and hospital stays. There are no networks. They sell the policies primarily through associations–some of which they have conceived. The sales people generally tell prospects that that the scheduled amounts are not too far off actual charges–say $350 a day for hospital stay, $400 for a specific surgical procedure. In actuality, the insurance covers only a small fraction of the charges, particularly in the absence of network discounts. Most prospects would be better off negotiating with the providers than paying premium with these policies.
    These mini med policies are sometime sold on a group basis to employers not able to afford regular group insurance. This allows the employer to claim employees and prospective employees that he offers a health benefit. While employees feel that they have coverage,
    they really have none.

  11. Wow. I’m reminded of the simplicity of a Medicare-for-all system, which of course is not perfect and must be contained.
    But now we have thousands of for-profit health care plans and rip-offs that the public must also contend with. When are we going to wake up?

  12. Watch the PBS’ NOW Show on Junk Health Care, “Payment Due,” Featuring Dana Christensen and FTCR Advocates
    “CHRISTENSEN: My husband needed a couple of surgeries and one surgery, his lung surgery, when we went to be admitted into the hospital, surgery was scheduled, the admittance office told us it was the worst policy they’d ever seen, that that policy was so poor, we had to come up with $8,000 just to be admitted into the hospital.”
    “BRANCACCIO: They paid that eight thousand dollars themselves, but other bills started piling up.
    It turns out, their insurance was not covering a major portion of Doug’s medical costs: $13,000 here, $27,000 there… almost $70,000 on this one.”
    “CHRISTENSEN: And then one day my husband was in excruciating pain and the morphine we had at home, nothing I could do would relieve his pain, so I called Cedar Sinai to say I’m bringing him in, he needs — he needs something. He needs to be relieved of this pain. And they said I’m sorry Mrs. Christensen you guys are not allowed through these doors anymore, your insurance has capped out, they’re not paying us anymore and your bills are high. And we can’t allow you to come through these doors anymore.”

  13. Matt, I think you’re right. I also think your “I told you so” will not be the last “I told you so.”

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