Commerce Department says seniors misled by company

Associated Press

ST. PAUL -- Hundreds of Minnesota seniors have been misled by a company selling supplemental Medicare insurance policies, Commerce Commissioner Jim Bernstein charged Tuesday.

Bernstein said a two-year investigation found the United American Insurance Company repeatedly violated state insurance law.

He said the company lies to prospective customers, chiefly older people dependent on Medicare, by saying they'll lose benefits unless they buy supplemental insurance from them.

"This was not a case of rogue agents. This was not technical violations," Bernstein said. "This was an irresponsible corporate culture at work in Minnesota."

The company and three agents could face felony criminal charges and civil and regulatory penalties, including losing its license, he said. The charges must first be endorsed by an administrative law judge.

Joyce Lane, spokeswoman for the company, which is chartered in Delaware but headquartered in Texas, disputed the charges generally but declined to address specifics.

In a statement, the company said it believed the complaint was politically-motivated and added it had long-running dispute with some people in the department.

Bernstein said agents with the company talked their way into seniors' homes without telling them they were selling insurance.

Instead, he said, the company directed its agents to say they were calling on behalf of "United American Health Services," and say they wanted to present information about changes to Medicare law.

Agents then convinced many into purchasing policies that were more expensive than the policies they already had, even though they provided less coverage, he said.

"They scared the Dickens out of them," he said. "It's not hard to scare people about Medicare."

Bernstein said anyone holding a policy with the company, which has been investigated by at least 10 other states, should call the department.

Two of the three agents charged worked in Duluth but have since moved to Illinois. The third worked in the Bemidji area.