Cover Me

Kathern Cathey thought she had an insurance policy that would save her life. Not exactly.

Schwartz, a celebrity M.D. and best-selling author who makes the rounds on news and talk shows, was quoted in the press release as saying, "Cinergy Health is an insurance benefits company that actually puts the individual first. Its affordable health insurance coverage is as innovative as any medical breakthrough I've seen...As someone who's been involved in patients' rights for years, I am proud to be associated with this company."

Her confidence in Cinergy was remarkable, as the company has been selling limited insurance products for less than a year. Prior to that, it was what's called a DMPO — discount medical plan operator. These companies sell a package of noninsurance benefits that allow cardholders to receive discounts from doctors and pharmacies.

But maybe Schwartz thought Cinergy would be yet another platform for her to push "bio-identical hormones" — largely FDA-unregulated alternatives to drugs like Premarin, used for the treatment of menopausal symptoms. Bio-identical hormones, which have not been subjected to comprehensive clinical testing, have a tendency to appeal to the physicians, "holistic" practitioners and patients who believe in a government-American Medical Association-Big Pharma conspiracy to keep people sick and pump them with expensive, toxic prescription meds.

Cinergy's "member services" number doesn't appear to provide good service for its members.
Daniel Kramer
Cinergy's "member services" number doesn't appear to provide good service for its members.
While she waits to hear if she'll get the surgery she needs, Kathern Cathey relies on painkillers to make it through.
Daniel Kramer
While she waits to hear if she'll get the surgery she needs, Kathern Cathey relies on painkillers to make it through.

In 2008, Schwartz appeared on Houston doctor Steven Hotze's radio show, where she shared with the guest host her belief that, when she was growing up, breast ­cancer was virtually unheard of, and that it is one of many "diseases that have been created to serve the big drug [companies]."

As Cinergy proudly trumpeted in its announcement that Schwartz was joining its team, the good doctor co-founded the Bio-identical Hormone Initiative, which serves to enlighten people with a stubborn adherence to evidence-based medicine.

But Torossian was reluctant to elaborate on these press releases, like the one announcing Schwartz. Perhaps this reluctance to answer basic questions is indicative of the limited insurance/discount plan industry as a whole: You are not actually supposed to ask what it is you're buying. You're supposed to see the infomercial or the blast-fax or the sign on the side of the road, pick up the phone and give your credit card number. And you're definitely not supposed to look into the backgrounds of the people you're signing over your health and money to.

Because if you do that, you might find a business history, and that might make you think twice. It's much better for these companies if you just stick with whatever you're told on an infomercial. If not, you might be admonished by a lawyer. A lawyer like Matt Anthony, who represents Cinergy, and who wrote a letter to the Press stating, "A great potential for harm exists to the present and future business endeavors, professional and personal reputation of Mr. Daniel Touizer in the careless, let alone malicious dissemination of false information or innuendo."

But really, all we wanted to know was this: What is it exactly that Cinergy offers?

For that, Torossian referred us to the Web site, which outlines Cinergy's limited medical insurance plan, underwritten by American Medical and Life Insurance. These plans are meant to cover routine medical expenses. Cinergy's Preferred 1000 plan (which Cathey has) states that it covers among other things the following:

• Doctor visits: "100 percent up to $100 per visit up to five visits per person per year"

• Preventative tests: "covers 100 percent up to $100 per visit; one test per person per year"

• Emergency room: "covers 100 percent up to $100 per visit, one visit per person per year"

• Daily hospital confinement: "covers 100 percent up to $1,000 per day up to 30 days"

• Surgery benefit: "Pays 80 percent of Surgery (Medicare schedule); no annual limit."

While Cinergy's infomercial may not emphasize the limited nature of these policies, its Web site clearly does. Yet for some reason, Cathey believed she was buying comprehensive coverage. (Maybe she focused on the 100 percent part and never saw the up-to-$100-a-visit limit.)

In 2006, Cinergy became a member of the Dallas-based Consumer Health Alliance, which touts itself as the "national trade association of the discount healthcare industry." The Alliance claims to serve more than 28 million people through its member companies.

The Alliance was formed in 2002 and is proud of the fact that it established a code of conduct before state and federal regulators began regulating discount medical companies, which by 2004 were starting to attract a lot of heat; state authorities were bombarded with complaints that these companies were passing off their product as insurance. That code states in part that a "discount program operator must ensure that a discount healthcare program's advertising, solicitation, and marketing materials and practices do not utilize words and phrases in a manner or context that improperly implies the program is insurance, and are not otherwise deceptive, unfair, or misleading," and "a program operator must approve all advertising, solicitation, and marketing materials to be used by marketers and take steps to halt the use of unapproved advertising, solicitation and marketing materials by marketers."

The year that Cinergy joined the Alliance, Florida's Office of Insurance Regulation gained oversight of discount medical plan operators and promptly enacted some of the strongest oversight in the nation. Texas's Department of Licensing and Regulation gained oversight of discount medical operators in 2008, and a bill passed earlier this year will transfer oversight to the Texas Department of Insurance in 2010.

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