Lawsuits against Mega Life and Mid West on the Rise

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UPDATED: Aug 5, 2019

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Written By: Jeffrey JohnsonUPDATED: Aug 5, 2019Fact Checked

If you have healthcare insurance, you may have assumed that the majority of your medical needs are covered under your policy. Of course, you probably expect to pay something out-of-pocket, such as co-pays, deductibles and even some miscellaneous expenses. But what happens when it seems like nothing is covered? That is exactly what has happened to consumers with policies from Mega Life and Health Insurance Company, and Mid-West National Life Insurance Company of Tennessee. Both companies are owned by Healthmarkets, Inc.

Mega Life and Mid-West Fail to Deliver Promised Coverage

Consumers should be able to rely on their insurance agent for accurate information about what their policy covers, and what it doesn’t. However, Mega Life and Mid-West have been highly criticized, and the subject of numerous complaints and lawsuits, for focusing their agents’ training on guerilla sales tactics, rather than on what the policies actually cover. Hundreds of Mega Life and Mid-West policyholders have reported similar accounts of agents telling them anything they wanted to hear – just to make the sale.

Mega Life and Mid-West Leave Families Under-insured and Deep in Debt

An unsuspecting family in California found out the hard way that the policy they had purchased from Mega Life was vastly different from what the insurance agent had promised them. This family was told by the agent that their Mega Life Insurance plan would cover the majority of any necessary procedures. According to the complaint filed in a California state court, their agent had told them that the most they would have to pay out-of-pocket would be $15,000. Sadly, this was a flat-out lie. When the wife was later diagnosed with colon cancer, they learned that their Mega Life policy only covered a small percentage of hospital stays and chemotherapy treatments. The family ended up paying $200,000 in out-of-pocket expenses – and they had Mega Life insurance!

In another case, a retired California couple in their late 60s purchased a policy from Mega Life for over $400 per month; they were told that they would have $1 million in coverage. However, according to an article in Business Week, when they both became ill, they were left with over $200,000 in medical bills. Mega Life paid for only a fraction of their expenses, and even accused the couple of lying on their application — something the couple vehemently denies.

New Parents Promised Full Medical Coverage, Left with Ruined Credit

A self-employed Colorado couple decided to purchase health insurance through Mega Life for the specific purpose of having a child. Their agent told them that they were able to get full medical coverage at a good rate, as they were being grouped with other self-employed people. The couple specifically asked the agent about pregnancy coverage. They were told that pregnancy was covered under the plan, but that there was a 12-month waiting period. The couple waited the year, became pregnant and began submitting their medical bills for reimbursement.

One by one, Mega Life denied the couple’s medical bills. When they contacted Mega Life, they were told that the ‘pregnancy box’ on their application had not been checked and therefore, they did not have coverage. Additionally, they were then told that even if the box had been checked, Mega Life had a 24-month waiting period, so they wouldn’t have been covered anyway. Furthermore, the agent who had sold them the policy was by now long gone, and unable to answer for the fact that the coverage he had promised, the reason they had purchased the policy in the first place, did not, in fact, exist.

The couple – now new parents – was unable to pay their medical bills, leaving the young couple with bad credit. Adding insult to injury, according to reports, Mega Life offered the couple $3,000 to settle the claim – as long as the couple signed a waiver absolving them of any future claims or bad faith lawsuits.

Cancer Patient Left in Financial Ruin by Mega Life

Another sad, but not uncommon, case involved a man in southern California whose cancer was in remission. When looking for medical coverage, he was told by the agent that Mega Life would provide a rider that would include coverage for him if his cancer ever returned; he ended up purchasing a policy from Mega Life for several hundred dollars per month. However, when his cancer did return, Mega Life only paid for a small percentage of his treatment because, unknown to him, his policy contained huge deductibles. In addition, the policy limits for hospital stays were well below what hospitals actually charge – leaving him ruined financially.

Lawsuits Filed Nationwide against Mega Life

These complaints and lawsuits are just a small sample of the many filed against Mega Life, its sister company Mid West and its parent company HealthMarkets. The circumstances of each case are different, but the result always seems to be the same – denied claims. The situation has gotten so bad that most states have fined the company after investigating the way the company does business.

If you purchased insurance through Mega Life, Mid-West, HealthMarkets, National Association for the Self-Employed (“NASE”) or Alliance for Affordable Services, take a moment to review your policy; find out specifically what is covered and what is not. Don’t rely on what the salesperson told you – if it turns out that your healthcare policy is anything but what the agent promised you, contact an attorney who understands how insurance companies operate.

If you have already had medical bills or claims denied, or if you feel Mega Life, Mid-West, or any other insurer, have acted improperly or in bad faith, contact an attorney experienced in health insurance law. To contact an attorney for a free and confidential consultation, click here.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

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