The Montana insurance department has shut down one insurer's so-called "association scam," in which it allegedly conducted illegal marketing practices to sell health insurance policies. The state insurance department is requiring it to pay $170,000 in medical bills for victims.
National Better Living Association (NBLA) allegedly bought limited-coverage, inexpensive insurance policies and then hired "high-pressure" telemarketers to sell those policies as if they were major medical insurance, according to Montana Commissioner of Securities and Insurance (CSI) Monica Lindeen.
In a settlement announced Wednesday, Allied Health Benefits, Inc.--a company affiliated with NBLA--agreed to pay $25,000 and will stop selling its products in Montana, reported the Associated Press.
One of NBLA's call centers also settled with the commissioner, paying a $15,000 fine and agreeing to cease business in Montana, while two of the insurance companies backing the policies agreed to settle more than $170,000 in medical debt accrued by Montana victims, KTVQ reported.
"Association scams are one of the worst insurance scams operating today," Lindeen said. "By leading people to believe they had the full coverage of major medical health insurance, these scams damaged not only their victims' wallets, but their health."
CSI investigators said NBLA telemarketers obtained victims' phone numbers from fake "get-a-quote" websites, claiming to compare health insurance products. Most of the victims didn't realize how little their insurance plan covered until after they underwent a costly medical procedure and filed a reimbursement claim, noted the AP.