Perhaps you fill out a form online for individual healthcare insurance. Maybe you didn’t even fill it out at all. Your telephone number is listed on the federal “Do Not Call” list. But how bad is competition for your business in the healthcare marketplace?
Ryan Dursky with the Center for Insurance Ethics says it’s likely worse than you could ever imagine.
“Payouts can be fairly lucrative if you can win the business” Durksy says. But winning the business is half the battle.
One day a few months ago, I was shopping around for a new healthcare policy. In doing so, I went to esurance, a popular insurance website that connects would be shoppers with what are supposed to be, reputable insurance agents and carriers. Within minutes, my phone began ringing off the hook.
Not only did my phone ring off the hook, but I began getting text messages, emails and even Facebook messages from agents looking for my business and “authorized healthcare professionals” who would connect me with a “friendly licensed agent” in order get me, what they claimed would be the best possible deal on healthcare insurance.
What would follow was days (and nights) of endless telephone calls, text messages and emails. Polite, friendly, modern day beggars looking for the few dollars each month that my new policy would bring them.
Was I alone or were there other Americans falling into the death grip of this vicious and often scandalous world of health insurance competition?
“In Texas, we are proud of our state and we want to do business with people that we know and recognize. You won’t always get that” says David Creighton of the consumer watchgroup Texans for Local Trade. “You can live in Florida and portray yourself as the guy next door and actually be in a total other state.”
And that is exactly what happened to me.
One Tuesday evening I get a text message from a telephone number with the area code 727. It was from Florida and as I read, I realized that this was another of the countless agents begging for my business. I told him as much and that’s when the insults began.
This text message came from Joseph Peter Lynch, who began to become extremely outraged following my having called him a beggar. After all, Lynch had repeatedly attempted to get me to take his quotes, at one point insisting that he could get me the best rates. He even insisted by asking what harm could a quote hurt?
In fact, after having dealt with over 100 calls that day, along with 78 text messages and 367 emails, who would want to deal with another insurance company begging you for your business? Nobody, right?
It turns out that Joseph P. Lynch was in fact a Texas licensed health insurance agent. But digging deeper, Lynch was based in Florida—not Texas. He works for a company called US Health Advisors, a subsidiary of US Health Group, a company that claims to have won numerous awards for their outstanding work.
The company’s website seems to show that they offer nearly every type of health insurance product imaginable. The CEO of US Health Group, Troy McQuagge says “We’re proud to have been recognized year after year with some of the most prestigious business awards, the coveted Stevie Awards. Such world-class awards demonstrate an unmistakable truth; that excellence in business doesn’t just happen…it has to be earned.”
But did this agent exhibit that?
“Of course he didn’t”, says Robert Ergman, a retired insurance testing examiner. “You were a little rude, likely being frustrated from your endless calls from agents and brokers but he did not by any means have any right to make such responses. No matter how insulted he felt.”
Sandra Blankenship says her experiences with US Health Group were similar to mine.
“These people called and called, texted and texted until I was so sick of it that I just gave in a nearly bought a policy” Blankenship said.
“That’s what they hope for” says Michael Caskekl, a health and human services watchdog in Texas says. “They hope they are the lucky one that gets you so frustrated that you buy a policy from them just to get them to go away.”
Experts say that one side effect of the Affordable Healthcare Act is that the market becomes too competitive.
“When you open up competition it does often benefit consumers” Caskel says. “But what it also does is open it up to insanely aggressive sales tactics that border on illegal.”
“I would certainly report this guy and his company”, Caskel says.
But why all of the calls, texts and emails?
The answer is simple. Competition is so tough and enforcement from the Federal Trade Commission is so limited, the risk of minimal punishment is worth the reward for most of these insurance brokers and their agents.
“These companies know that the chances of getting busted by the FTC is very slim. Even if they do, the punishment is usually little more than a minimal fine” Mr. Ergman claims.
Ergman says that when you enter your information on insurance websites such as esurance, you give them the green light to sell and distribute your information to countless brokers and agents around the country.
Ergman goes on to explain that before buying a policy, you should verify their license to sell in Texas and make sure that they are reputable companies with verifiable ratings.
“The best practice would be to never buy something as vital as health insurance from a company that blows your phone up with calls and text messages” Caskel says.
“My advice would always be go through a trusted, local agent” says David Creighton. “You can’t be too careful when it comes to the health insurance marketplace today.”
As for the comments made by Mr. Lynch, US Health Group has refused to comment, but one could assume that his calls will continue right along with unapologetic and rude comments when he is called a beggar. Perhaps, a “ruthless beggar” would be more appropriate.