Hall of Shame 2010: American Trade Association

By James Quiggle
January 2, 2011

Fake health plan sickens victims

Anxious for affordable health insurance in a lousy economy, thousands of consumers flocked to American Trade Association (ATA) for what its aggressive marketers claimed was decent coverage at a good price.

But mostly the victims received worthless piece of paper or stripped-down policies that delivered little except empty promises that left some victims with thousands of dollars in unpaid medical bills.

Bart Posey headed up the Tennessee-based ATA. He skillfully preyed on people’s anxiety in a down economy, launching one of America’s biggest fake health plans at a time when bogus operations like his were spreading like poison ivy around the U.S.

ATA bilked at least 12,000 trusting customers and stole as much as $14 million in premiums. Bogus health plans have spread rapidly in the U.S. during America’s traumatic economic trough.

Plans exploit desperation. Some 50 million Americans have no health coverage, or can’t afford premiums. That’s a large pool of targets. And ATA swooped in hard, promising decent coverage at reasonable prices.

“ATA bilked at least 12,000 trusting customers and stole as much as $14 million in premiums. Bogus health plans have spread rapidly in the U.S. during America’s traumatic economic trough. ”“They preyed on people who couldn’t afATA bilked at least 12,000 trusting customers and stole as much as $14 million in premiums. Bogus health plans have spread rapidly in the U.S. during America’s traumatic economic trough. ford to be scammed,” one customer service rep admitted. “Many of the callers were Hispanic or Asians who could barely speak English, and some of them were dying of cancer and couldn’t get their bills paid... “People would call in crying, but we were instructed to tell them that their claims were ‘in process’ and to call back in 30 days. We were told to flat-out lie to people just to get them off the phone.”

Posey’s fraud mill pounced on victims with blast faxes, pushy telemarketers, a slick website and other effective marketing weaponry.

ATA often paid small claims to fool policyholders into believing their coverage was real, but Posey refused to pay larger expenses for more-serious medical conditions.

Bills not paid. Just days away from having his heart pacemaker implanted, former Oklahoma real estate agent Bob Harper discovered his supposed ATA health insurance was useless.

Another Oklahoma resident, Glenda Hey, experienced shortness of breath and chest pains. She went to the hospital for $32,000 worth of tests that ATA never paid.

A Houston man’s wife said he had emergency back surgery, only to discover ATA refused to pay any part of his $105,000 bill. Nor did the outfit pay his $7,500 bill for emergency treatment of a kidney stone.

A New Jersey man said he began chemotherapy, only to have his doctor tell him his ATA coverage was worthless. The man was forced to file for charity care with his hospital.

ATA operated in the shadows, avoiding required state licenses. But as complaints from fleeced consumers piled up, and alarmed regulators went after ATA and its octopus-like network of affiliated fraud factories.

ATA was booted from at least 20 states over the last two years. And Tennessee’s insurance department delivered a potentially fatal blow to the Tennesee-based fraud factory by liquidating Posey’s operation.


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