‘Junk insurance’ comes back to haunt its policyholders


McClatchy DC has the story ‘Junk insurance’ comes back to haunt its policyholders.

“These junk policies have been crafted pretty carefully,” he said. “When I talked to people and they shared their contracts with me, the language can be very confusing, even for somebody like me.”

The complaints are a familiar refrain for HealthMarkets, which is owned by three prominent Wall Street private equity firms: Goldman Sachs Capital Partners, The Blackstone Group and Credit-Suisse-DLJ Merchant Banking Partners.

Consumer lawsuits and state insurance regulators across the country have targeted the company for years over its market conduct and sales and marketing practices.
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Last year, state insurance regulators slapped the company with a $325,000 penalty for not meeting five of 95 performance measures that were part of the $20 million 2008 settlement agreement. The unmet measures dealt with training and oversight of agents.

Were you as surprised as I was to find out that Wall Street private equity firms: Goldman Sachs Capital Partners, The Blackstone Group and Credit-Suisse-DLJ Merchant Banking Partners are involved in this story?  (That was sarcasm, in case you didn’t recognize it.)

It wouldn’t surprise me if most of the people who claim that they have cheaper, catastrophic only health insurance policies, actually have policies like the ones described in this article.  They believe the fallacy that they don’t need no stinkin government help to make these complex decisions on buying health insurance.  After all, they have had a wonderful experience with their insurance companies and have saved a lot of unnecessary expense. (As long as they don’t get sick.)  If you have health insurance that is only good if you don’t get sick, you aren’t saving money; you are wasting money.  Why pay a cent for an insurance policy that is actually worthless?  If you are going to spend any money at all on insurance, at least buy a policy that insures you for something.

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