Patients With Over $680K In Medical Bills Call For Ban On Junk Health Insurance

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Federal “Association Health Plan” Legislation Would Remove State’s Right To Regulate

Sacramento, CA — A consumer group and three patients who were left with $680,000 in medical bills even though they were insured in “association health plans” called on the state legislature to cap the amount of money patients must pay out of pocket for health care.

Later today, the consumers will testify at a California Assembly hearing in support of a bill (AB 2281, Chan) that would cap the amount that patients must pay out-of-pocket at $10,000 per year for couples and $5,000 for individuals.

Consumers from Southern California, the Bay Area and Northern California spoke in support of AB 2281:

  • Erik Lehrer of Santa Rosa was left with $30,000 in medical bills when his daughter suffered from diabetic shock and the family’s insurance company refused to cover hospital costs.
  • Dana Christensen of Playa Del Rey owed more than $450,000 when her husband died of bone cancer even though they had insurance and had purchased a special rider for chemotherapy. On his deathbed, Dana’s husband, Doug, asked her to divorce him so she would not be responsible for the bills. She refused.
  • David Henderson of Penn Valley had unpaid medical bills of more than $180,000 after he and his wife coped with multiple surgeries. The Henderson’s insurer eventually paid less than 15% of their costs.

Erik Lehrer, Dana Christensen and David Henderson spoke out against “bare bones” policies that shift the burden of health care costs to patients through high deductibles, co-pays and other charges. The Lehers’, Christensens’, and Hendersons’ health policies had no limit on out-of-pocket costs for patients

“Insurance isn’t insurance if it doesn’t protect us from financial disaster when we get sick,” said Dana Christensen, a volunteer with the Foundation for Taxpayer and Consumer Rights (FTCR) who lives in Playa Del Rey, California. “These plans aren’t worth a dime because they allow insurance companies to sell junk policies that gouge consumers when they are sickest and need coverage the most.”

Federal legislation to expand association health plans, like those purchased by Lehrer, Christensen, and Henderson, and pre-empt state controls is likely to be voted on by U.S. Senate next week. The bill, S. 1955 by Senator Enzi (R-WY) would remove such Bush-backed health plans from accountability under state patient protection laws.

The Christensens’ and Hendersons’ stories can be found in an online resource published by FTCR outlining the plans’ skeletal benefits:

“We were told the insurance would pay 80 to 100 percent of medical expenses for catastrophic illnesses. When both of us were hit with catastrophes within one nine-month period, we were left hanging with $180,000 in unpaid medical debts,” said David Henderson of Penn Valley. “The insurance paid less than 15 percent. And we worry that others like us will end up risking their health, and their lives, because of costs.”

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.

“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?” asked Dana Christensen. “Mega Life 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!”

Lehrer, Christensen, and Henderson will testify today at the Assembly Health Committee meeting scheduled to begin at 1:30 PM in Room 4202.

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The Foundation for Taxpayer and Consumer Rights (FTCR) is the state’s leading non-partisan and non-profit 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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