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AG Cooper busts health discount scam

Release date: 9/22/2005

Health benefit program doesn’t deliver promised discounts, says Cooper

Raleigh: A health benefit program that promised steep discounts on doctor’s visits and drugs but failed to deliver must stop pitching their program to North Carolina consumers, Attorney General Roy Cooper said today.

“North Carolina families thought they were getting something like insurance that would help them cope with health care costs,” said Cooper. “But the plans these telemarketers sold turned out to be worthless, and the discounts they promised evaporated.”

Wake County Resident Superior Court Judge J.B. Allen today granted Cooper’s request to temporarily stop National Healthcare Association, Inc. of Houston, Texas from pitching its healthcare discount program in North Carolina. Cooper is seeking to permanently put a stop to the company’s unfair and deceptive business practices and to bar the firm from making illegal telemarketing calls in the state.

In addition, the Attorney General is asking the court to order National Healthcare to reveal the names of its North Carolina customers and pay them refunds. Cooper’s suit also asks the court to require National Healthcare to pay civil penalties for both illegal telemarketing and deceptive business practices.

According to Cooper’s suit, National Healthcare made illegal pre-recorded sales calls to people in North Carolina to market a plan that the company said would provide big discounts on medical care. Sales representatives told consumers that the plan included insurance-like benefits such as 60% off the cost of doctor’s visits, 60% off prescription drugs, and 80% off of hospital stays. Consumers were also told that they could use the discount at any doctor and could cancel for a full refund within 30 days.

As alleged in the complaint, a consumer protection specialist with Cooper’s office posing as a potential customer was told that the National Healthcare’s network included nine out of every ten doctors, had 2,700 employees and 2.6 million members nationwide. The sales representative described the program as “like a hybrid car” because it was half a discount plan and half an insurance plan that would cover a family of four for $99 a month plus a sign-up fee of $90.

Despite the company’s claims, Cooper contends that the program does not work like a health insurance plan and the vast majority of doctors, hospitals and pharmacies do not offer any discounts to National Healthcare customers.

“Be skeptical of pitches that are long on promises of health care savings but short on specifics,” Cooper cautioned consumers. “If you’re considering a health discount plan, find out how it will work with your insurance, and whether or not your doctor and pharmacy will honor it.”

[Services provided by MCPA have been transferred to the Health Insurance Smart NC Program.].