What is Salvasen Health? The Rise and Fall of a Controversial Health Insurer

Salvasen Health burst onto the health insurance scene in 2020 with big promises of affordable, comprehensive health coverage. However, behind the glossy marketing was an illegal operation that left thousands of customers without the coverage they paid for. This article takes an in-depth look at Salvasen Health – who they were, how they operated, and why regulators stepped in to shut them down.

Overview of Salvasen Health

Salvasen Health was founded in 2020 and based in Houston, Texas. The company was led by CEO Barry Jay Glenn.

Salvasen marketed health insurance plans across the United States, selling approximately 65,000 plans to individuals and families. The company promised quality coverage at affordable prices compared to traditional health insurance.

However, Salvasen Health was not actually licensed to sell health insurance in any state. They operated without oversight from state insurance regulators. This enabled them to sell non-compliant plans that did not meet requirements under the Affordable Care Act.

In April 2022, the Texas Department of Insurance (TDI) ordered Salvasen to stop selling unauthorized insurance and initiate a shutdown. This action was taken after numerous consumer complaints about denied claims and insufficient coverage.

Salvasen’s Business Model and Products

Salvasen Health positioned itself as an innovative alternative to traditional health insurance plans like those offered on the Affordable Care Act (ACA) marketplaces.

The company offered a range of health plans including:

• Short-term limited duration plans
• Fixed indemnity plans
• Healthcare sharing ministry plans

These types of plans are not considered full insurance under the ACA. They have caps on coverage and can exclude pre-existing conditions. However, they typically have lower monthly premiums compared to ACA plans.

Salvasen marketed heavily to individuals who found ACA plan premiums unaffordable. Their website prominently displayed low monthly prices for coverage.

However, the full scope of limitations and exclusions was not always made clear to consumers upfront. Complaints indicate many customers believed they were getting comprehensive major medical insurance.

Red Flags and Compliance Issues

In retrospect, there were many warning signs that Salvasen Health was not operating legitimately:

Lack of insurance licenses

Salvasen sold nationwide but was not licensed as an insurer in any U.S. state. Selling insurance without a license is illegal.

Use of offshore entities

Salvasen routed premium payments through entities based in the Caribbean and Central America. This type of offshore setup is commonly used to evade regulatory oversight.

Rapid growth

Salvasen went from zero to 65,000 members in about 18 months. Rapid expansion is risky in insurance, especially without proper reserves and capitalization.

Affordability promises

Salvasen’s low rates implied they were underpricing risk. This raises concerns about the insurer’s financial stability.

Limited transparency

Salvasen provided limited plan details and financial disclosures compared to licensed insurers. They avoided regulatory filings that would have revealed deficiencies.

Deceptive marketing

Complaints indicate Salvasen agents sometimes misrepresented plan limitations or made other false claims while enrolling consumers.

These issues point to an operation designed to avoid regulatory compliance rather than meet it. State insurance regulators eventually took action after being flooded with consumer complaints.

Consumer Complaints About Salvasen Health

As members started using their Salvasen health plans, problems began to arise:

• Claim denials: Many customers had large claims denied on the basis of undisclosed plan limitations or exclusions.

• Unaffordable care: Some members still faced prohibitively expensive costs for basic medical care due to benefit caps or limitations.

• Rescissions: Salvasen retroactively canceled some members’ policies after they filed large claims.

• Lack of coverage: Consumers realized too late that their plans did not cover key services like hospitalization, prescriptions, or maternity care.

• Customer service issues: Members had difficulty getting information or resolution on claims from Salvasen’s customer service.

By early 2022, state regulators had received hundreds of complaints from Salvasen Health members. It became clear the company was misleading consumers and failing to deliver promised benefits.

Regulatory Action Against Salvasen

In April 2022, the Texas Department of Insurance (TDI) issued a “cease and desist” order against Salvasen Health for selling unauthorized insurance. Under the order, Salvasen must:

• Immediately stop selling health insurance plans
• End all existing health plan policies by March 31, 2022
• Continue paying claims until all obligations are met
• Refund consumers’ premium payments if money remains after claims are paid

Additionally, the CEO Barry Jay Glenn is banned from seeking an insurance license in Texas for 10 years.

TDI warned consumers who bought Salvasen plans to seek coverage on the Affordable Care Act exchange during a special enrollment period. This provides access to comprehensive health plans meeting ACA standards.

Regulators in other states followed TDI’s action and also issued cease-and-desist orders to halt Salvasen’s illegal activities in their jurisdictions.

What Happens Next for Salvasen Members?

The regulatory crackdown aims to shut down Salvasen Health while protecting consumers. Members should take the following steps:

• Transition to a licensed plan: Immediately seek an alternative through the health insurance marketplace or other licensed carriers. This ensures you have comprehensive regulated coverage.

• Run out existing coverage: If you have an active Salvasen policy, continue using it for care until your termination date. But have a new plan lined up to avoid a gap in coverage.

• Document everything: Keep records if you experience claim issues or denial of services under your Salvasen plan. This evidence can support any future restitution actions.

• Stay on top of claims: Keep submitting claims to Salvasen until your policy ends. This establishes your right to any final payments owed under the plan terms.

• Watch for updates: Check state websites for updated consumer guidance related to the Salvasen shutdown.

The Salvasen story provides an important lesson on avoiding “too good to be true” health insurance offers. Consumers should carefully research carriers and look for signs of compliance issues or illegal conduct. Purchasing insurance is a complex decision – the cheapest premium does not always equal the best value.

The Takeaway: Choose Licensed, Compliant Health Coverage

Salvasen Health sought to capitalize on demand for affordable health insurance. However, their business model was unsustainable and outside the law. This left thousands of Americans uninsured and stuck with unpaid medical bills.

Consumers should learn from this debacle and seek licensed health coverage that meets ACA standards. Warning signs like ultra-low premiums, pre-existing condition exclusions, and benefit gaps should prompt extra scrutiny into a health plan’s legitimacy.

Though traditional health insurance remains expensive, ACA marketplace plans are designed to provide meaningful coverage with consumer protections. The peace of mind offered by compliant health insurance is worth the cost for most households.

Rather than gamble on shady discount plans, consumers should get informed about exchange options, financial assistance, and how to make the most of ACA protections. This is the path to finding health coverage you can actually rely on when you need it most.