KHI News Service

Prominent Kansas insurance agent sanctioned for misrepresenting ACA

Insurance department cites Ozawkie agent for publishing misleading information about Obamacare

By Mike Shields | April 08, 2014

In a move that may be unprecedented simply because of the subject matter involved, the Kansas Insurance Department has fined a prominent insurance agent $1,000 for publishing false and misleading information about the Affordable Care Act.

Scott Day of Day Solutions LLC, which is based in Ozawkie, signed off on a "consent agreement" with the department that, in addition to the dollar penalties, called for him to publish a correction to the misleading statements he had published in Metro Voices, a publication distributed free in 500 northeast Kansas locations.

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Scott Day

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Scott Day consent order

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Agents obliged to be truthful

Day's problems with the department stemmed from a column he published in November 2013. The column noted he was president of the Kansas Underwriters Association and a member of the Kansas State Employees Health Care Commission. It also included five statements that the department concluded were "misrepresentations."

Since the controversial law generally known as Obamacare was passed in 2010, there have been any number of false or misleading statements about it from scores of sources, including from nationally prominent radio and TV personalities and elected officials. But the sanctions against Day apparently are the only ones that have been issued in Kansas by the insurance department specifically because of falsehoods about the law.

The insurance department, among other things, regulates insurance agents and as part of its routine duties is called to sanction agents for "untrue or deceptive" practices. The regulations specifically authorize sanctions for publishing misrepresentations about insurance.

"We regulate the business of insurance. We don't have authority over anybody who doesn't sell insurance," said Zac Anshutz, a lawyer and assistant commissioner at the department, explaining why anyone else could lie about the law and probably get away with it.

Complaint-driven process

Anshutz said he wasn't aware of any other sanctions issued by the department for "misrepresentation" of the Affordable Care Act.

But he said sanctions against agents for other types of misrepresentation were not unusual. The agency's investigations of them typically result from a complaint filed by a customer, member of the public or someone else in the industry.

"We don't really have the ability to go out and monitor every statement or activity" by an agent, he said, so it generally is a complaint-driven process.

Anshutz said he didn't know who filed the complaint against Day but that the department's action against him was taken solely because the investigation revealed he had acted inappropriately.

"Just because it hasn't happened before specifically dealing with ACA doesn't mean we were targeting him," he said.

Day did not dispute or contest the department's findings. He signed a consent agreement and order on Jan. 28, stipulating to the facts determined by the agency and agreeing to print a correction to his column and pay two $500 administrative penalties.

Big opportunity

Day did not return phone calls and emails over a period of days seeking comment for this story. Nor did Joe Patton, Day's attorney in the proceedings with the insurance department. Patton is a Topeka lawyer who recently served in the Kansas House of Representatives.

Insurance Commissioner Sandy Praeger, a Republican, has differed with many in her party, especially in Kansas, by being generally supportive of Obamacare.

Day was an early and vocal critic of the 2010 law, though he recently stated publicly that it has benefited his business.

"I don't like the law. I don't like where I think it's going to take us. But on the other hand, it's the biggest opportunity I've ever seen," Day said during a panel discussion hosted by the Kansas Health Institute in February.

'Huge disappointment'

Sheldon Weisgrau, director of the Health Reform Resource Project, has been traveling the state the past three years speaking to groups about the law and what's in it.

He said he considered Day's published inaccuracies about the law "a huge disappointment."

"I think the public's understanding of the law is pretty low," Weisgrau said. "And there's a couple of reasons for that: One is that it's a big, complicated law and it's unreasonable to expect everyday people to understand it. That's why it is very important for public officials and political leaders and people in the health care system to try to understand it and help the public understand it. And I think that's what's been missing: the role of public leadership.

"Politicians have free rein to lie (about the law) and deal with the consequences at the ballot box," he said. "But insurance agents are licensed by the state and in exchange they agree to be truthful and provide accurate information. Fair or not, that's the way it is."

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