Delvin bill to stop health insurance scammers passed by Legislature

April 14, 2009

OLYMPIA…In response to a constituent’s personal story, Sen. Jerome Delvin, R-Richland, introduced a consumer protection bill that allows the Office of the Insurance Commissioner to regulate discount health plans. The measure won legislative approval Monday through a vote by the House of Representatives. 

“This is a victory for every consumer,” Delvin said. “Many of these so-called discount health plans sell what appears to be health insurance coverage, but what is actually discount rates from a few providers. Consumers are duped into thinking they’re getting low-cost health insurance only to learn their providers don’t accept it or the services they need are not covered.  It’s simply unfair, and now it’s going to stop.”  

Senate Bill 5480 will require discount health plans, typically offered on radio, TV and the Internet, to be licensed by Washington’s insurance commissioner. The companies will be required to submit an annual financial statement, a list of providers, and details of exactly how their plans work. Each plan must also reveal the number of members it serves and exactly how it handles complaints.  

“I am ecstatic this bill passed,” said Robert S. Welk, the insurance agent specializing in health care who first contacted Delvin. “People depend on reliable health care and it’s tragic to see them manipulated by unscrupulous companies. I ran into that all the time and finally approached Senator Delvin about it. This new law will save people a lot of heartache.”  

“Robert’s story was not an isolated incident,” Delvin said. “The insurance commissioner has received more than 400 consumer complaints on discount health plans. I’m delighted to report the party’s now over for these discount insurance scammers.” 

With this legislation, discount health plans must now produce marketing materials clearly stating what they offer and where consumers can use the services. They must also provide a toll-free number, a Web site and an updated list of providers who accept their plan.  

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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