Four insurers yesterday were ordered by the state yesterday to pay $2.2 million to 3,475 seniors in New York for overcharging them on insurance policies.
But the insurers said Gov. Andrew Cuomo and Benjamin Lawsky, the superintendent of the state Department of Financial Services, are trumping up their charges.
The insurers, including Excellus BlueCross BlueShield in Rochester and two in Westchester County, said they are required by law to return unused payments to seniors who pay for Medicare supplemental insurance.
“There’s no investigation. There’s no violation of law. This is a self-reporting thing that we’ve done every year,” said Robert Waegelein, president of Universal American, the parent company of American Progressive, which was named by the state and based in White Plains. “I was quite taken aback by the disclosure of it that way.”
Lawsky, though, alleged that the four insurers were ordered to make the refunds because they failed to comply with state law. He said the insurers are required to spend a minimum amount of policyholders’ premiums on medical bills – not administrative expenses or to add to profits.
“We will continue to vigorously enforce these critical consumer protections, which help keep premiums down and insurance companies honest,” Lawsky said in a statement.
Updated: Lawsky spokesman, Matt Anderson, reiterated the office’s position.
“The premiums they overcharged New York seniors were higher than what is allowed under insurance law and the companies were required to pay back what was owed to consumers. It’s as simple as that,” Anderson said.
Seniors who are eligible will get on average about $624 per policyholder, the state Department of Financial Services said. The money will start to be distributed next week.
The four insurers were American Progressive; Excellus; First United American near Syracuse and Transamerica Financial Life in Harrison, Westchester.
Excellus also claimed that the state was misrepresenting the insurance claims. Jim Redmond, a spokesman for Excellus, said health plans are required to annually report the amount of medical benefits paid out to consumers compared to premiums collected. Then a refund is determined for some policyholders.
“We had lower-than-anticipated medical expenses for some Medicare Supplemental A policies in the prior year, so we are mailing out refunds to customers,” Redmond said in a statement. “It is an annual adjustment process that we support — it’s that simple.”
Lawsky’s office said the insurers will be distributing refunds to consumers. Seniors can contact their insurers with questions. If a consumer has complaints, they can contact the department’s consumer help line at 1-800-342-3736.