Central United Life Insurance Company Accused Of Shortchanging Its Policyholders
A civil lawsuit has been filed against Central United Life Insurance Company (“Central United”) alleging that the company illegally changed the terms of its cancer insurance policies in order to avoid paying thousands of dollars due to its policyholders who get treatment for cancer. Central United sold insurance contracts known as “specified disease” policies which promised to pay policyholders the amount charged to them for their medical care if they are diagnosed with cancer, even if their treatment is actually paid for by health insurance.
The lawsuit, filed by the Missouri Department of Insurance, alleges that Central United changed its claims-handling practices to drastically reduce payments to policyholders with cancer. It is alleged that Central United decided to pay policyholders based on treatment costs, rather than actual damages. For example, when consumers with health insurance receive medical treatment, insurance companies pay a negotiated rate, which is less than the rate billed to the consumer. Central United allegedly reimbursed its policyholders who got cancer the lower negotiated rate -- not the actual rate billed to the consumer -- thereby shortchanging its policyholders of thousands of dollars on their medical claims and saving itself thousands, if not millions, of dollars.
“The very essence of insurance is providing protection when life-changing events occur,” said John M. Huff, Missouri Department of Insurance, Financial Institutions and Professional Registration, commenting on the civil lawsuit filed against Central United. “There are few events more life-changing than cancer, and this arbitrary decision by Central United is an attempt to abandon its solemn responsibility to protect its policyholders facing a serious and sometimes deadly disease.”
If you are a consumer who purchased a Central United cancer policy, please contact us to discuss your legal options.