The Federal Trade Commission (FTC) has announced two health insurer brokers will pay a total of $145 million on charges they misled millions of consumers who wanted to buy comprehensive health insurance.
In separate actions, the federal agency alleged that both Assurance IQ, LLC, a Washington limited liability company, and Los Angeles-based MediaAlpha, Inc., deceived consumers and led them to purchase plans that did not provide the promised health care coverage and bombarded consumers with telemarketing and robocalls. Assurance IQ will pay $100 million, and Media Alpha will pay $45 million to resolve the allegations. The money will be used to provide refunds to harmed consumers, the FTC said.
In the first complaint, the FTC claimed that Assurance IQ violated the FTC Act and the Telemarketing Sales Rule (TSR) by using telemarketing to deceptively market and sell health plans, specifically short-term medical and limited benefit indemnity plans bundled with supplemental products like telemedicine plans, prescription discount plans, and dental and vision discount plans.
The FTC said that telemarketers made deceptive statements to consumers about the health plans’ actual costs and benefits, including that they provided coverage for preexisting conditions, did not have caps on benefits, allowed access to medical provider networks that would lower consumers’ costs significantly, and incorporated supplemental products. The agency also alleged that Assurance unfairly charged consumers without first getting their express informed consent.
The FTC alleged in the second complaint that MediaAlpha, Inc., used advertisements and websites claiming to provide health insurance quotes to collect information from consumers looking for insurance so the information could be sold to telemarketers. In 2024, MediaAlpha sold approximately 119 million leads about consumers.
The agency maintains that MediaAlpha attracted consumers to their health care-related lead generation websites using misleading domains such as “ObamacarePlans.com” that imply they are associated with the government and claim that consumers will be able to buy low-cost, comprehensive health insurance that complies with the Affordable Care Act.
In addition, the FTC alleged that MediaAlpha hired actors and celebrities to promote a non-existent government “Health Insurance Give Back Program” to drive consumer traffic to its health sites. The agency said MediaAlpha even paid a doctor to appear in scripted “advertorial” news segments and suggest that “millions of Americans … were able to qualify for a great health plan for $1 a day” using the defendants’ lead generation services.
Many consumers, including those whose phone numbers were listed on the national Do Not Call Registry, were flooded with robocalls and telemarketing calls that made false and misleading claims about the health care plans provided by MediaAlpha’s partners, who in fact rarely provided the low-cost comprehensive health care plans that MediaAlpha promised, according to the complaint.