A Texas health insurer yesterday agreed to cough up $17 million in fines and other costs and will be barred from signing up new Massachusetts customers after it was accused of not delivering on promises to self-employed workers and other policyholders.
The settlement between HealthMarkets Inc. and the state is believed to be the largest consumer protection agreement by a health plan in Massachusetts history.
HealthMarkets Inc., mostly through its Mega Life and Health and Mid-west National Life subsidiaries, has about 27,000 customers in Massachusetts.
HealthMarkets has been battling for years with regulators over accusations it hasn't properly overseen its agents. In 2006, it agreed to pay $850,000 to settle disputes with the state.
Yesterday, Attorney General Martha Coakley and Insurance Commissioner Nonnie Burnes signaled they've had enough with HealthMarkets, whose spokesman couldn't be reached for comment.
"With health reform in Massachusetts and the requirement that individuals in Massachusetts have health insurance, it has been even more important to stop predatory practices in the health insurance market," Coakley said in a statement.
In an interview, Burnes said HealthMarkets just wouldn't or couldn't control the inaccurate coverage promises made by representatives to potential customers.
"They weren't controlling their agents," Burnes said.
Under the deal with Coakley, Health Markets will pay $17 million, much of it going to compensate people for coverage-related disputes. The firm is banned from signing up new customers for five years, Coakley's office said.
Under a separate deal with Burnes, HealthMarkets will pay an additional $2 million -- and possibly $3 million more if it doesn't abide by agreements.
The settlement between HealthMarkets Inc. and the state is believed to be the largest consumer protection agreement by a health plan in Massachusetts history.
HealthMarkets Inc., mostly through its Mega Life and Health and Mid-west National Life subsidiaries, has about 27,000 customers in Massachusetts.
HealthMarkets has been battling for years with regulators over accusations it hasn't properly overseen its agents. In 2006, it agreed to pay $850,000 to settle disputes with the state.
Yesterday, Attorney General Martha Coakley and Insurance Commissioner Nonnie Burnes signaled they've had enough with HealthMarkets, whose spokesman couldn't be reached for comment.
"With health reform in Massachusetts and the requirement that individuals in Massachusetts have health insurance, it has been even more important to stop predatory practices in the health insurance market," Coakley said in a statement.
In an interview, Burnes said HealthMarkets just wouldn't or couldn't control the inaccurate coverage promises made by representatives to potential customers.
"They weren't controlling their agents," Burnes said.
Under the deal with Coakley, Health Markets will pay $17 million, much of it going to compensate people for coverage-related disputes. The firm is banned from signing up new customers for five years, Coakley's office said.
Under a separate deal with Burnes, HealthMarkets will pay an additional $2 million -- and possibly $3 million more if it doesn't abide by agreements.
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