AP NEWS

Congressional panel investigates Stamford insurance company

March 18, 2019

STAMFORD — A local health-insurance company is facing a Congressional investigation for allegedly selling “junk” plans that discriminate against individuals with pre-existing conditions and put them at financial risk.

The probe by the House Committee on Energy and Commerce focuses on “short-term, limited-duration” insurance sold or brokered by Stamford-based Independence Holding Co., and 11 other companies. Independence specializes in group and individual “specialty benefit” products, including disability, supplemental-health, group-life and pet-insurance policies.

“We are troubled that consumers who sign up for these plans are being misled about the nature of the coverage they are purchasing,” said a letter from committee Chairman Frank Pallone Jr., D-N.J.; and two subcommittee chairmen, Anna Eshoo, D-Calif., and Diana DeGette, D-Colo., sent last week to Independence CEO Roy Thung.

“Consumers are being denied coverage, even for medical care that is rightfully covered under the terms of their contract, through a process known as post-claims underwriting,” the letter said.

Messages left for Independence were not returned.

In the letter, committee members said they were “extremely concerned” that customers trying to enroll in Independence’s STLDI plans were being denied coverage entirely; charged more based on age, gender or health status; or denied access to “basic health care benefits” such as prescription drugs, treatment for substance-abuse disorders and maternity treatment.

They also said they were concerned about customers who sign up for STLDI policies being denied or stripped of coverage of care that might stem from what the company considered pre-existing conditions.

The letter referenced The New York Times reporting on a heart-attack survivor who was left with $900,000 in medical bills after his insurer refused to cover bypass surgery under his STLDI plan and a stroke survivor who faced $250,000 in unpaid bills because her policy did not cover prescription drugs and other basic treatment.

In addition, the committee cited a Georgetown University Health Policy Institute study that it said found that insurers and brokers selling STLDI plans often use misleading marketing tactics, including the omission of services and benefits that are excluded from coverage.

The committee has requested a range of documents, including those relating to Independence’s compliance with the Affordable Care Act, its marketing of STLDI plans, its underwriting and its processing of complaints.

As part of the same investigation, the committee is also examining the STDLI plans of Agile Health Insurance, Anthem, Arkansas Blue Cross Blue Shield, Blue Cross Idaho, Cambia Health Solutions, eHealth, Everest, Health Insurance Innovations, Healthcare Solutions Team, National General Accident and Health and UnitedHealth Group.

Independence and its subsidiaries are together known as The IHC Group, a collective that comprises three insurance companies: Standard Security Life Insurance Co., of New York; Madison National Life Insurance Co., Inc., and Independence American Insurance Co., as well as marketing-and-distribution firm IHC Specialty Benefits Inc.

In 2018, Independence recorded revenues of about $350 million, up 9 percent from 2017.

pschott@scni.com 203-964-2236; twitter: @paulschott