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Sorrell settles with health plan seller

By John O'Brien | Mar 28, 2007

MONTPELIER, Vt. - Vermont customers of PrudentChoice will receive full refunds because of a settlement recently reached between the company and Attorney General William Sorrell.

PrudentChoice, an Irvine, Cal.-based seller of discount health plans, was charged with violating the state's Consumer Fraud Act.

Sorrell says the company sold plans to at least 89 Vermont customers at a total cost of more than $25,000, even though the company couldn't make good on its promises of discounts on services by physicians, hospitals, dentists and other health care providers.

Sorrell added that only one major community in the entire state had a participating hospital within 25 miles, and that that hospital only offered a discount of 10 percent -- an amount Sorrell said a consumer could negotiate on his or her own.

PrudentChoice must pay the state $33,000 in civil penalties and $5,000 in costs.

The settlement was filed last week in Washington County Superior Court. A report by The Associated Press quoted PrudentChoice attorney Craig Zimmerman as saying, "PrudentChoice has never had any unsatisfied members in the state of Vermont. PrudentChoice adamantly believes there's a place for discount health care in Vermont and in the United States."

The report also says Sorrell's office surveyed 24 customers, 21 of whom said they could not find a participating provider.

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