Health insurance scams are on the rise
Con men and scams are as old as mankind. Stories of unscrupulous people taking advantage of the misfortune or confusion of others fill our history. Today, swindlers are more sophisticated and more devious than ever before and health insurance scams are one of the most common types of fraud perpetrated.
The latest: Fake insurance salespeople have been going door-to-door, using email, fax and phone calls to sell "Obama-care insurance" to a confused, economically depressed public.
"They are claiming it is required under the new reform act," James Quiggle, spokesman for the Coalition Against Insurance Fraud, which represents consumers and insurance companies, explains. "They are knocking on doors, saying they are with the federal government, here to sell you federally required Obama-care health insurance. And it's only available on a limited basis. Some people are falling for it."
The problem is so wide-spread, Secretary of Health and Human Services, Kathleen Sebelius, sent letters to each state's Insurance Commissioner and Attorney General during the first half of 2010, asking them to investigate, and if necessary, prosecute scammers.
Scammers take advantage of health reform confusion
With more than 2,000 pages in the bill, very few people understand exactly what all the provisions in the health reform act mean to them, and grifters are taking full advantage of that confusion, Quiggle says. Additionally, the depressed economy and rampant unemployment have made this the perfect storm for scammers who are casting a wide net for victims.
Anyone who might be in need of health care insurance is a target, whether it is someone out of work and navigating the individual health insurance market for the first time, or the small business owner looking to cover employees, or even seniors and low-income groups looking for cheap health insurance coverage.
"Scammers don't' care who you are they just care about how green your money is, Quiggle says.
"It's not surprising that people fall prey to health scams, especially in this economy," he continues. "People are suffering financial setbacks, losing their jobs, they're cash strapped and looking for, unfortunately, an easy way out."
If it looks too good to be true…
Health insurance scams are sold using several methods. Faxes may arrive, promising full coverage for hard-to-insure circumstances like maternity care, and pre-existing conditions, all for a low monthly price. You might also see TV ads and e-mails offering limited-time, open enrollment periods. All of these devices have one thing in common--none of them are what they appear to be.
"People need to cast a very wary eye at deals that seem suspiciously good when health insurance is so expensive for so many Americans," Quiggle says. "How is it possible for someone to walk in out of nowhere and suddenly offer full benefit health coverage for $29.99?"
If such an offer comes your way and it looks like just the health insurance plan you've been looking for, ask yourself if it's too good to be true. A reputable insurance company is unlikely to offer blanket coverage, regardless of whether or not you have a pre-existing condition. Nor do things like "government-mandated" insurance policies exist. Discount cards offering access to thousands of providers might sound like a good thing, but how can you be sure any are in your area?
Quiggle recommends picking up the phone if you are faced with the "is it real or is it fake" question." You can save yourself a world of hurt by one simple phone call before signing up. Call your state insurance department to see if the provider is licensed in your state," he advises. "Fake health plans avoid being licensed because they don't want regulators asking questions.
Other ways to spot a health insurance scam
Quiggle also offers the following advice to help you spot a health insurance scam:
- Be very wary of telemarketers who try to pedal limited-time offers for health coverage. "Any reputable insurance company will not demand you 'sign up now or else,'" Quiggle says.
- Insist on being given a full copy of the entire policy and reviewing it in detail before signing up. Take the time to make sure the policy is valid.
- Have an expert in health coverage review the policy with you. "If the telemarketer also says, 'don't worry, all you need to know is contained in the brochure,' hang up and walk away. That could mean there isn't even a policy to speak of," Quiggle says.
- Ask yourself, "What is this person trying to hide from me?" "If an insurance company isn't committed to full disclosure, then that's a serious problem," Quiggle states.
- There is no such thing as "Obama-care," it does not exist, Quiggle says. Plus "the feds are not sending employees out into the field to pedal coverage. Door-to-door sales aren't in their game plan."
If you find yourself the victim of one of these fake health insurance plans, report it immediately to your state insurance department. Some states have regulatory agencies that may deal with cases of insurance fraud. If you get stuck with medical bills you didn't anticipate because of a health care swindle, Quiggle says contacting the health care provider or facility to negotiate some leniency in billing might be your only choice.
"That's the danger of making a quick decision to buy into a suspicious health plan," Quiggle says. "The average American should be on high alert, not only to understand what legitimate coverage means, but what the bogus coverage means. That's our challenge in this environment."