At the request of the Federal Trade Commission, tens of thousands of consumers who bought medical discount plans from Simple Health Plans LLC that were deceptively marketed as comprehensive health insurance, and who are still currently paying monthly fees, will be notified that they do not currently have comprehensive health insurance, but can enroll in a comprehensive plan during a special enrollment period.
The notices have been authorized by a U.S. District Court that is overseeing a lawsuit filed last year by the FTC against Simple Health, in which the agency alleged that the company collected more than $100 million by preying on Americans in search of health insurance and selling them worthless plans that left tens of thousands of people uninsured.
The notices to Simple Health customers who are still paying will clearly state that their products are “not comprehensive health insurance” and that, “If you get sick or have to go to the hospital, you may have to pay almost all of your medical bills.” The notices will provide a phone number and a link to a website where consumers can cancel their products and stop the monthly billing. The notices also will inform consumers that the Centers for Medicare and Medicaid Services, a federal government agency, is offering them a special enrollment period to apply for comprehensive health insurance and will provide instructions on how to do so.
The consumers who were deceived by Simple Health and are still paying are billed by a third party administrator, Health Insurance Innovations, Inc. (HII). HII is not a defendant in the FTC’s case against Simple Health.
“There is good cause to believe that due to Defendants’ deceptive sales practices, many Existing Customers still believe that they purchased comprehensive health insurance or its equivalent from Defendants and do not know the true nature of the Products for which they are being charged,” U.S. District Judge Darrin P. Gayles, of the U.S. District Court for the Southern District of Florida, wrote in an Order authorizing the notices. “Consumers should be provided with an opportunity to make an informed decision about whether they would like to continue paying for and receiving the Products.”
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
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