$195m fine for sham insurance peddler

The Federal Trade Commission obtained a $195m judgment against Simple Health, which sold insurance plans that for most customers would never pay out. The sham insurance scheme ran for years and "misled people into thinking they were buying comprehensive health insurance that would cover pre-existing medical consitions, prescription drugs" and inpatient and emergency hospital care, but did not.

In granting the FTC's motion for summary judgment, the Federal District Court in the Southern District of Florida also banned Simple Health, five related entities and Dorfman from telemarketing and from marketing, promoting, selling or offering any healthcare products.

"Simple Health preyed on consumers by selling them bogus health care insurance that cost them thousands of dollars for 'benefits' that in fact left consumers unprotected," said Samuel Levine, Director of the FTC's Bureau of Consumer Protection. "We are pleased the court recognized this blatant bait and switch and ordered the company and its CEO to turn over the money they bilked from consumers."

Here's how the sham insurance scheme worked:

In a complaint filed in 2018, the FTC said that Florida-based Simple Health misled people into thinking they were buying comprehensive health insurance that would cover preexisting medical conditions, prescription drugs, primary and specialty care treatment, inpatient and emergency hospital care, surgical procedures, and medical and laboratory testing. In reality, most consumers who enrolled reported paying as much as $500 per month for what was actually a medical discount program or extremely limited benefit program that did not deliver the promised benefits and often left consumers with thousands of dollars in uncovered medical bills, or worse yet, unable to get necessary healthcare.

Googling the company's name shows it redirecting to a new brand and another healthcare wheeze. Hopefully this shuts that down, too.

Previously: Geico must pay $5.2 million to a woman who caught HPV while having sex in an insured car