Suing Mega Life or Mid-West for Health Insurance Claim Denial

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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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UPDATED: Aug 5, 2019

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If you’re self-employed, or otherwise without health insurance, chances are you have had to turn to a private insurance company for medical coverage, which can be extremely expensive. So, when a self-employed person finds comprehensive medical coverage at a low rate, it is no surprise that they jump at it, possibly missing some of the policy details that a traditional Human Resources Manager would go over in an employer-employee relationship.

Unfortunately, this eagerness for a “good deal” is exactly what Mega Life and Mid-West have counted on to deceive consumers into purchasing their insurance products. Potential policyholders are told by unscrupulous salespeople that they are buying major medical insurance; they are told that they are able to keep the monthly rates low due to high deductibles and because they are being grouped with other self-employed people, thus qualifying for a group rate through the National Association for the Self-Employed (“NASE”) or Alliance for Affordable Services. This is simply untrue.

Aggressive Agents Market Mega Life and Mid-West as Major Medical Insurance – and it’s NOT!

The cold, hard truth is that Mega Life and Mid-West’s insurance products are actually limited schedule policies, a far cry from major medical coverage. Countless numbers of consumers have complained that claims for even the most basic services, such as lab tests, doctor visits and prescriptions, have been denied by Mega Life and Mid-West– even though sales representatives told them that would all be covered. Sadly, they usually find this out when it is too late – after they have racked up thousands, even hundreds of thousands of dollars worth of medical bills…all denied by Mega Life or Mid-West, its sister company. Both of these companies are owned by Healthmarkets, Inc.

I fell for the MEGA scam! This agent promised me all these awesome benefits and when it came time to use them they have paid almost nothing. … I learned my lesson the hard way! MEGA has all of these little loopholes in their coverage and they like to talk in circles when you call them wanting to know why they aren’t covering a single $!
– Amy, former MEGA policyholder

Anatomy of Mega Life and Mid-West Claims Denials

For many with Mega Life or Mid-West insurance, years can pass before they realize there is a problem with their medical coverage. Since these policies come with very high deductibles, often $3,000 to $5,000, many insureds have never met the deductible, as they have been basically healthy. It is not until they have a serious health crisis that they discover the policy they purchased is a lot different from what they were promised by the insurance agent.

Typically, upon medical treatment, the policyholder, or the medical provider, files a claim with Mega Life or Mid-West. They have been paying their monthly premiums, and so assume that once they have met their deductible, the majority of their medical expenses will be covered by Mega Life or Mid-West. The first hint a policyholder usually has that they are in trouble is when they receive an explanation of benefits (“EOB”) form in the mail; the EOB forms come in after the medical provider has billed Mega Life or Mid-West. It is at this stage, upon receipt of the EOBs, that the insured realizes that the policy they purchased from Mega Life or Mid-West are not, in fact, major medical, and is covering their medical treatments at a MUCH lower rate, if at all. The EOBs will say that the policyholder has met their deductible, but that that they still owe, for example, $8,000 out of a $10,000 bill, and then another bill comes in and they owe $15,000 of an $18,000 bill. The bills just keep coming, and Mega Life and Mid-West cover little, if anything at all.

Mega Life sells health insurance door to door to poor to middle and low income working people. They claim that they are selling a product that their customers understand. But the point their customers clearly do not understand is that the insurance has severe limits on what it pays, especially what it pays per day in cases of expensive care. So if a policyholder gets sick and needs hospital care, Mega Life only pays out a fraction of what the hospital charges, leaving the poor sucker patient on the hook for the rest.
– Kevin, former MEGA Life sales representative

Mega Life and Mid-West Say “Tough Luck” to Policyholders

When the insured receives these EOB forms, and realizes that their treatment is not being covered to the extent that they expected, they try to call the agent that originally sold them the Mega Life or Mid-West policy. However, not unexpectedly, Mega Life and Mid-West agents have a very high turnover rate; the agents are usually long gone by the time the insured gets that first denial of benefits. No recourse there!

When the policyholder contacts Mega Life or Mid-West, the standard response is “Did you read your policy? If you had read the policy you would have understood that it is a limited policy, not major medical, and these bills are not covered under the policy”. Essentially, Mega Life and Mid-West say that they are just complying with the terms of the policy.

By this point, the consumer, from under a mounting pile of debt, realizes that Mega Life or Mid-West have defrauded them; what they were sold was not what they were told they were purchasing. If they have not done so already, the next step is often to contact the Department of Insurance in the state in which they live, and to find an attorney experienced in insurance matters.

You CAN Sue Mega Life and Mid-West for Fraud

On the surface, Mega Life and Mid-West may seem well within their legal right to deny these claims. The policies they are selling are limited schedule policies, and so the claims that they are denying may be in line with the policy terms. The issue becomes one of fraud, however, since Mega Life, Mid-West and their agents are lying to consumers about the product they are purchasing. Consumers are being told they are purchasing major medical insurance, and that is simply not the case. Policyholders are often dependent on what the agent told them, because most people don’t have the expertise to fully understand the terms of the policy. Therefore, even though a policyholder did not have complete knowledge of the Mega Life or Mid-West policy they purchased, they can STILL sue for fraud, since they were relying on what the agent said and what the marketing brochures promised.

What Sort Of Damages Can I Win from a Lawsuit Against Mega Life or Mid-West?

Although the law varies from state to state, in general your legal team will file for and request contractual damages, as well as recovery of attorney fees; in other words, what Mega Life or Mid-West should have paid, based on what was promised. If someone has $100,000 worth of medical bills, the attorneys will look to recover the full $100,000, in addition to all legal fees, so that the lawsuit costs the plaintiff nothing. A case can also be made for emotional distress damages for the worry and strain this has placed on the insured. And finally punitive damages can also be sought, to punish Mega Life or Mid-West so they don’t do this to anyone else. An experienced attorney will be able to go over what damages are most appropriate for your case. To contact a qualified attorney, please click here. Consultations are free, without obligation, and strictly confidential.

How An Attorney Can Help You Stand Up to Mega Life or Mid-West

Pursuing a case against a company such as Mega Life or Mid-West, who have armies of their own attorneys waiting to combat contested claims denials, involves a lot of time, research, and documentation. You will need an attorney with experience in insurance matters to review the claims, the policies and the advertising information you received, as well as the dates of application, to determine if you really have a case.

The attorney will want to see the insurance policy itself, and all of the marketing materials that you received when you purchased your policy, if you still have them. Keeping a good set of records is very important in this process- the more documentation you have, the easier it is to prove a case, and typically with a better outcome.

The initial consultation with the attorney is free. If your legal team decides that you have a case, they will file a lawsuit against Mega Life or Mid-West. Many firms represent the plaintiff on a contingency basis, meaning there are no up-front fees. If you win the case, the attorneys will be paid from a portion of that settlement – otherwise, the attorneys receive no compensation. In fact, often attorneys are able to recover legal fees from Mega Life or Mid-West, so no portion of your monies would go to cover legal expenses.

To contact a qualified attorney, please click here. Consultations are free, without obligation and strictly confidential.

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