Poolman squelches Florida company - Issues Cease and Desist Posted on 6/7/2006
FOR IMMEDIATE RELEASE
Contact: Jim Poolman
June 7, 2006
701-328-2440
Bismarck, ND - North Dakota Insurance Commissioner Jim Poolman today issued a Cease and Desist Order against American Medical Services, a Florida-based medical discount plan company. Poolman said that the company has advertised in North Dakota in violation of a state law aimed at curbing abuses in the marketing of discount medical plans.
This Cease and Desist Order is the fourth issued to enforce a law that was passed in 2005. "I'm concerned about the pattern that has developed over the past year or so. We've had trouble with three of these types of companies in the past. Apparently, these discount plans are attractive to consumers because of the low price they advertise." Poolman added, "We receive many phone calls from consumers are interested in finding out about these plans, specifically, whether or not they are insurance. Clearly, these types of plans are not insurance and should not be marketing themselves as such."
Poolman's order alleges that American Medical Service's advertisement lacked the proper disclosures and was misleading. The advertising that the company uses may give the uninformed consumer the false impression that the plan advertised is insurance.
Many of the plans list a wide array of benefits for extremely low rates. The deceptive part is that there may be no providers in their community or surrounding area. In addition, the advertising for these plans rarely discloses that the consumer is responsible for paying the provider bills. In addition, consumers may experience some difficulty getting a refund from the company if they decide later that they don't want to be part of the plan.
"I want to send a clear message that people need to check out these companies prior to signing up to make sure they are valid companies. This will only save time and trouble later on when trying to get a refund, Poolman said." The North Dakota Insurance Department advises that before purchasing any type of insurance or discount plan, consumers should call the Insurance Department's "Consumer Hotline" at 1.800.247.0560 to confirm whether a company is licensed to sell insurance in North Dakota.
Poolman has compiled a list of tips to help consumers decide whether or not to purchase a medical discount plan. Please visit the section called Consumer Tips at the Insurance Department website's homepage, www.state.nd.us/ndins. Consumers may also call the Insurance Department's Consumer Hotline at 1.800.247.0560 for the same helpful information.
