Insurance Care Direct's Leadership Team Faces Questions after Malicious Marketing Scheme Exposed in Newly Filed Lawsuit

SANTA MONICA, Calif., Aug. 23, 2021 /PRNewswire/ -- Vulnerable Americans who needed comprehensive medical insurance were fooled into buying limited healthcare plans that didn't meet their needs by Insurance Care Direct (ICD), which used misleading advertising according to a new federal lawsuit filed by California-based McLaren Insurance Solutions.

The lawsuit also explains how ICD hired well-connected former politicians to escape regulatory scrutiny, such as former United States Senator and Governor of Nebraska, E. Benjamin Nelson and former Oklahoma Insurance Commissioner, John Doak. The ICD website currently lists six members on its Board of Advisors, including Frank Keating, former Oklahoma Governor and Jeff Atwater, former Chief Financial Officer for the state of Florida.

"These former politicians were either aware of, or should have been aware of ICD's deceptive conduct," said Jim Gale, one of the attorneys representing the plaintiffs. "Either these individuals are all well aware of ICD's scheme and have condoned this unlawful and deceptive conduct, or they have been willfully blind to this conduct in return for large paychecks."

Filed in the United States District Court for the District of California, the complaint (Case 2:21-cv-06066) describes a scheme masterminded by ICD's Seth Cohen and others, hinging on false and deceptive advertising as well as the inappropriate use of other insurance agencies. Families and individuals looking to purchase healthcare coverage were led to believe they would be receiving comprehensive health insurance through reputable insurers like Humana, Blue Cross/Blue Shield, United Healthcare, Cigna, Aetna, or others. But instead, the ICD scheme forced nearly every person to purchase a limited benefit plan that exposed the consumers to the risk of being under- or un-insured.

"ICD used deceptive and misleading marketing tactics to rip people off," said Gale. "This wasn't about getting people coverage. This was about ICD making money and padding its pockets on the backs of unsuspecting victims."

The lawsuit alleges the people who bought these policies were carefully and deliberately targeted and deceived by ICD.

"Limited healthcare benefit plans can be right for many people," said Gale. "But they are not the same as comprehensive plans, and ICD and its many pseudonym entities simply deceived people through its advertising and marketing."

The ICD scheme involved operating websites under unregistered fictitious names, such as "Affordable Healthcare of California". Unwary consumers would go to these sites, which were filled with logos from well-known insurance carriers and language referencing comprehensive coverage plans sold on the official Health Insurance Marketplace®. Seeing these familiar companies, consumers would believe they were on a trustworthy website selling quality healthcare plans.

Consumers were then directed to share their personal information, including a phone number and email address, to receive "instant health plan quotes". But instead of seeing a quote, they would receive a phone call from an agent who, at the direction of ICD, would then lure the consumer into purchasing a limited benefit plan – the only type of plan ICD forced its agents to sell. These limited plans provided a much higher profit margin to ICD than the comprehensive plans they pretended to sell, but rarely, if ever, sold.

"As we detail in our lawsuit, ICD is a well-oiled marketing machine that takes advantage of people who are vulnerable," said Gale. "It's a classic bait-and-switch."

Allegations made in the lawsuit against ICD are similar to those against Simple Health Plans LLC, founded by Steven J. Dorfman. The Federal Trade Commission says Dorfman "misled people to think they were buying comprehensive health insurance that would cover preexisting medical conditions." That case is ongoing, according to the FTC.

In addition to the false advertising and unfair competition alleged in the complaint, ICD conducted their insurance business without a registered agent, which is a direct violation of insurance regulations. In fact, the person designated as the company's agent admitted under oath that he was just a "figurehead".

Attorneys for McLaren have already heard from many victims of this scheme and expect to hear from more. If you suspect you are a victim, email [email protected].

SOURCE McLaren Insurance Solutions

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