MORRISON TAKES LEGAL ACTION TO PROTECT MONTANA CONSUMERS
Florida Firm ordered to comply with Montana Insurance laws
Montana State Auditor John Morrison has taken legal action to protect consumers in Montana that have purchased insurance coverage through Florida-based Medi-Share. Morrison filed an administrative Cease and Desist Order recently ordering Medi-Share to stop transacting unauthorized insurance business in Montana and stop collecting payments from Montanans. Morrison’s action is based on a recent decision by the First Judicial District Court deeming Medi-Share as “an insurer acting in Montana without authority”. Morrison also ordered that Medi-Share continue to honor claims and obligations to Montanans that purchased the Medi-Share product and ordered the company to deposit a minimum of $1.5 million to protect the Montana Medi-Share customers that may have future pending claims. A Helena jury recently found Medi-Share also committed fraud, violated Montana’s Unfair Trade Practices Act, inflicted emotional distress and failed to pay claims in a timely manner.
“I am deeply concerned about the Montanans that have purchased this product through Medi-Share and I urge them to contact my office immediately to discuss their options. Also, any Montanan continuing to send their hard earned cash to Medi-Share needs to stop doing so,” said Morrison. “The purpose of filing this action is to do everything we can to protect consumers.”
The district court case was filed by a Montana pastor against Medi-Share alleging breach of contract and fraud, among other things. Medi-Share is not organized or licensed as an insurance company and is soliciting and selling unauthorized and unapproved products. Evidence introduced during the trial indicates that there are over 1,100 Montanans participating in the Medi-Share program.
The case was initiated after the Montana pastor incurred medical expenses for treatment of a heart condition and Medi-Share refused to pay for them. The pastor signed a contract with Medi-Share for coverage of his medical expenses. The company continued to maintain that they had no duty to pay claims. Medi-Share later agreed to pay the medical bills, but only after suit was filed.
“My office has made every effort to reach out to Medi-Share officials to help them through the process of becoming a legitimate insurance company,” said Morrison. “We offered to fast-track the process given the critical nature of the case, however Medi-Share has failed to apply for a Certificate of Authority and has also failed to provide us with the names of their members. We would like these Montana families to have legitimate coverage as soon as possible. The only way we can protect these consumers is if Medi-Share complies with the cease and desist.”
While operating as an unregulated entity it collected premiums of over $56 million nationwide, according to Medi-Share’s 2006 financial statement. Several states across the country have taken various legal actions against Medi-Share for similar violations.
“Unauthorized health plans operate in a regulatory vacuum. There is no accountability, no oversight, and the people who participate have little to no protection,” said Morrison “Unlike valid insurance companies, which are required to have reserve funds to pay claims, unauthorized insurers do not maintain reserves and there is no safety net for members when it comes time to pay claims.”
There are many options for legitimate coverage available in Montana. The team of advocates on staff with the Auditor’s office can help Montanans individually explore those options. Consumers are strongly encouraged to shop around before they commit to a policy and to confirm the legitimacy of a policy with the State Auditor’s Office before moving forward. Montana Medi-Share participants who need help finding legitimate insurance coverage or who may have also been denied payment for medical care by Medi-Share are urged to immediately notify the State Auditor’s Office by calling toll-free at 1-800-332-6148 or in Helena at 444-2040.