Chris Mitchell bought an excellent PPO Plan with an A-rated carrier that qualified as an ACA plan from Simple Health. Simple Health told Mitchell that the plan covered doctor visits; diagnostic testing; surgical, medical, and hospital visits; and medication. Mitchell was later diagnosed with cancer and needed surgery. Just days before his surgery, Mr. Mitchell learned that his plan did not cover surgeries, and he had to pay out of pocket for the cancer surgery.
This story was one of many complaints that prompted the Federal Trade Commission to sue Simple Health Plans, LLC. The FTC alleged that Simple Health had engaged in deceptive trade practices connected with a “bait and switch” scheme. Simple Health had brought in more than $180 million by selling limited medical indemnity policies and medical discount plans under the pretense that they provided comprehensive health coverage and were compliant with the Affordable Care Act.
The FTC sought a preliminary injunction prohibiting Simple Health from continuing to make fraudulent representations while the litigation was pending. To succeed on the preliminary injunction motion, the FTC was required to show it had a likelihood of success on the merits of its deceptive trade practices claim.
1. What did the court look for to determine whether Simple Health misled customers?
2. What did the court order Simple Health to do?