Limited Benefit Policies - Caveat Emptor!

State insurance regulators are busy investigating HealthMarkets, a company whose subsidiaries have sold limited benefit policies to consumers who allege that they were unaware of exactly what they were buying. According to the USAToday, consumers were unaware that these policies did not include coverage for doctor visits, or that coverage for hospitalization was capped at extremely low limits. These types of limited benefit policies are becoming increasingly popular as health insurance premiums skyrocket - monthly costs are minimized, but so are the payments made by the insurance company on your behalf.

The National Association of Insurance Commissioners notes that HealthMarkets and its subsidiaries (which include Mega Life and MidWest National) have a consumer complaint rate at least twice the national median. As a result, insurance commissioners are looking into their business and marketing practices very closely. However, HealthMarkets insists that it has instituted business practices which ensure that buyer are aware of what their policies cover. Until this issue is resolved, it is advisable to check the benefit limits of any health insurance policy very closely before buying - especially if you are buying from one of these companies. You may also wish to contact your state insurance commissioner to find out if there have been complaints about the company you are thinking about buying from.