Seattle, WAHundreds of people in the state of Washington have been left with costly medical bills and no healthcare insurance, despite the fact that they thought they had purchased comprehensive coverage plans from Nationwide Insurance. Instead, they found Nationwide had collected premiums for policies that were not licensed for sale in Washington and were not approved by the state's Insurance Commission.
Attorney Eleanor Hamburger, from the firm of Sirianni, Youtz, Meier and Spoonemore, has filed a multi-million dollar class action on behalf of the group claiming Nationwide Insurance violated the state's consumer protection laws.
"All the plaintiffs had cards from Nationwide Insurance that looked like real cards," Hamburger says from her Seattle office. "They received letters that said 'Welcome to your group health policy' and unless you got into the fine print it looked like you had a comprehensive policy."
Unfortunately, these were not comprehensive policies. Instead, they were Fixed-Payment or Fixed-Indemnity plans. "These plans set maximum payments for each service or expense that typically are far below what is charged by doctors, clinics, hospitals and other providers," says Hamburger. "They are unlike other plans that pay a percentage of medical expenses or cap the expenses that a consumer must pay."
Consumer groups have repeatedly slammed Fixed-Payment plans as little more than junk and that's what they turned out to be when people tried to use them in an emergency. "Two of my clients found out when they went to the hospital that they were not covered and are now stuck with medical bills they can't pay," says Hamburger.
According to the suit filed by Hamburger Nationwide's Fixed-Indemnity and Fixed payment plans, they do not comply with Washington State regulations requiring healthcare plans to guarantee certain minimum benefits and coverage when patients are hospitalized or given medical treatment. "These flat-fee plans are phenomenally inadequate," says Hamburger.
One of Hamburger's clients is now facing a $135,000 bill for brain surgery after she collapsed from a seizure and had to be airlifted to a hospital in the Seattle area; she then discovered that not only would it not cover costs as she expected, but it was also an invalid policy. "This has rendered her uninsurable," says Hamburger. "She could not afford then to buy new insurance because she now had a pre-existing condition."
"Nationwide was never approved by the state's insurance commissioner to sell any type of health insurance in the state of Washington," Hamburger says, "and even if they had tried to get approval, the kind of insurance they were selling was not legal to sell in the state of Washington as primary coverage."
From her review of the documents, attorney Hamburger says Nationwide is clearly in violation of the law. Her clients want to recoup their premiums and have medical costs refunded where applicable. Hamburger also argues that court has the power to reform the contract to meet the minimum requirements of Washington law at the time they purchased the policy.
"Then these people would get their benefits at least partially covered," says
Hamburger.
Nationwide's office in Ohio says it is looking into the matter and has no further
comment on the case.
Eleanor Hamburger received her law degree from New York University School of Law in 1993. She received her B.A. from St. Johns College in Annapolis, Maryland in 1988. Hamburger joined the firm in 2004. Prior to that she was a public benefits attorney with Columbia Legal Services.