Delvin bill targets health insurance scammers

February 2, 2009

OLYMPIA…In response to hundreds of consumer complaints across the state, Richland Sen. Jerome Delvin has introduced a bill to allow the Office of the Insurance Commissioner to regulate so-called “discount health plans.”  

Many of these plans claim to sell discount health insurance coverage, and consumers buy the plan only to learn that either their provider doesn’t accept it or that the services they need are not covered. 

“As health care costs skyrocket, people are shopping for low-cost health insurance,” Delvin said. “Unfortunately, some of these discount plans advertised on TV, radio and the Internet don’t explain how the discount works, where it can be used, or the services it covers. Unwitting consumers are simply taken in and cheated.”  

Senate Bill 5480, heard today in the Senate Health and Long-Term Care Committee, would require discount health plans to be licensed by Washington’s insurance commissioner. These companies would have to submit an annual financial statement, a list of providers, and details of exactly how their plan works. Each plan would also be required to cite the number of members it serves and how it handles complaints.  

Delvin has been working with the insurance commissioner on the legislation. According to the insurance commissioner’s office, consumers who have been duped by these unregulated firms believe they have actually purchased insurance, when they have simply bought discount rates at a few providers. SB 5480 would require these firms to produce marketing materials, which clearly state what is offered and where consumers can use the services, and provide a toll-free number, a Web site and an updated list of providers.  

“It’s unfair that consumers are buying these discount plans in good faith as an alternative to regular health insurance – and they’re getting scammed,” Delvin said. “This bill will force these companies to market their services honestly—or face legal action from the state.” 

If passed, the bill would become law this summer.  

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Sen. Delvin represents the 8th Legislative District, which includes
Richland, Kennewick, Benton City, and Prosser.

Additional contact: Pat Albright at (360) 786-7519 or albright.pat@leg.wa.gov