A federal judge has temporarily shut down a Florida organization from selling nationwide what the Federal Trade Commission called worthless health plans, bilking consumers out of more than $100 million, according to the FTC.
The United States District Court for the Southern District of Florida on Friday granted the FTC's request to temporarily stop Simple Health Plans from operating. The FTC is seeking to permanently stop the selling practices and return consumers' money.
Simple Health Plans falsely sold comprehensive insurance in a bait and switch scheme, the FTC said, running a deceptive telemarketing campaign that preyed on consumers - many of whom were uninsured and had a pre-existing medical condition - who were seeking affordable health insurance.
No one from Simple Health Plans could be reached for comment. Phone calls went to a non-working number and an email was returned.
WHY THIS MATTERS
Consumers who thought they had insurance coverage instead have been left with large bills for healthcare services.
Hospitals may be left with unpaid bills for uncompensated care.
Reputable insurers have had their names attached to this alleged sham coverage.
The shell company gained consumer trust by pretending to be affiliated with reputable insurers and organizations, such as Blue Cross Blue Shield Association and AARP, and by falsely claiming to be experts on government and Affordable Care Act insurance, the FTC said.
Ads also falsely featured affiliations with Anthem and Cigna by showing their logos.
The temporary restraining order went into effect on November 2, the day after open enrollment started and when insurers typically see an increase in plan sales.
The chance for individuals to buy less expensive, non-Affordable Care Act health insurance comes at a time when the Trump Administration is allowing for the sale of non-ACA compliant plans in association and short-term plans.
One Simple Health Plans advertisement directs consumers to trumpcarequotes.com.
Simple Health Plans offered neither ACA, short-term nor association plan coverage in a scheme the FTC has called the classic bait-and-switch.
Individuals paid hundreds of dollars per month for policies they believed would offer comprehensive coverage. But they enrolled in plans that provided few benefits, the FTC said.
WHAT ELSE YOU NEED TO KNOW
Defendant Steven Dorfman siphoned millions of dollars in proceeds for private jet travel, gambling sprees in Las Vegas, rent on his oceanfront condo, luxury autos, jewelry and a $300,000 wedding in Miami, according to the court document.
Consumers were saddled with tens of thousands of dollars in debt.
ON THE RECORD
"Deceived consumers are effectively left uninsured and subjected to nearly unlimited financial exposure," the FTC said in the complaint.
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