Consumer Group and Widow with $450K in Medical Bills Call on State Legislature to Protect Patients from Junk Health Policies

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Santa Monica, CA — A consumer group and a widow left with $450K in medical bills called on the state legislature today to cap the amount of money patients must pay out of pocket for health care prior to a legislative hearing on so-called “consumer driven” health plans.

“These plans aren’t worth a dime because they allow insurance companies to sell junk policies that don’t protect patients when they are sick,” according to Dana Christensen — a widow whose husband was insured under such a limited benefits association health plan but owed a half million dollars in medical bills when he died from cancer. Association health plans promise cheap, comprehensive coverage but don’t cap the amount of money consumers pay out of pocket.

The tragic story of Dana and Doug Christensen is part of a new online resource published by the Foundation for Taxpayer and Consumer Rights (FTCR) pointing out the skeletal benefits and new burdens under such high cost health proposals. Click here to visit FTCR’s resource page.

In August 2005, FTCR petitioned the Department of Insurance to investigate these illusory benefit plans. The Department has yet to schedule a hearing. Click here to read the petition.

“Insurance isn’t insurance if it doesn’t protect patients from financial disaster when they are sickest and need coverage the most,” said Carmen Balber of FTCR.

Association health plans (AHPs) are sold through organizations for small employers or the self-employed. They are marketed as a way to provide large group discounts to small businesses but the benefits are even worse than HMOs.

“These junk health plans are the worst case scenario for patients: higher costs and no protections,” said Jerry Flanagan of FTCR. “The state legislature must intervene to protect patients from medical bankruptcy by capping the amount that patients must pay out of pocket.”

Over the past month, the nation’s largest health insurers have reported near-record profit increases. WellPoint, which saw profits increase 250% in the 4th quarter of 2005, cited increased enrollment in health plans requiring patients to pay more out of pocket for its huge increase. In 2005, medical bills were responsible for half of all bankruptcies.

AHPs promise to pay 80% or 100% for most health treatments. But when policyholders get sick they discover that their plan caps the amount it will pay for hospitalization or serious illness. Families end up with large unpaid medical bills because they don’t get the coverage they were promised.

“What’s the point of paying for health insurance and then when you need it, discovering the benefits you thought were promised and paid for just aren’t there?” said Dana Christensen, a volunteer with FTCR who lives in Playa Del Rey, California. “Mega Life had told us that they would pay 80% of hospital costs and we would pay 20%. They didn’t tell us that chemotherapy was capped at $1,000 a day. Doug’s chemotherapy charges were as high as $18,000 a day!”

Though the Christensens were insured with an association health plan, Dana was left with $450,000 in unpaid medical bills when her husband died of bone cancer. Their insurance had no limit on out of pocket costs for patients, unlike traditional health insurance or HMOs. It covered only a small portion of chemotherapy costs even though Dana was told they’d had full coverage. On his deathbed, Dana’s husband Doug asked her to divorce him so she would not be responsible for the bills. She refused. Read the Christensens’ story here.

The California Assembly Health Committee will hold an informational hearing today following the Assembly floor session.

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The Foundation for Taxpayer and Consumer Rights (FTCR) is the nation’s leading consumer watchdog group. For more information visit us online at:

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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