FTC takes aim at health care insurance scams

By Megg Mueller on January 25th, 2011

FTC takes aim at health care insurance scams

U.S. Benefits. Health Care One. Consumer Health Benefits Association.

All of these organizations sound credible, possibly even government-sanctioned, don't they? Many people made the unfortunate mistake of sending money to these companies, thinking they were getting a great deal on health care insurance. What they got instead was often a medical discount plan that, at best, offered some discounted services, but otherwise, offered nothing else but a way to lose money.

Health insurance scams have become a growing problem since health care reform was enacted. Fraudulent companies have preyed on the public's confusion and fear about the coming legislation and changes to health care, promising cheap health care insurance and delivering, in most cases, nothing.

Common health care insurance deceptions

The three companies mentioned above have all recently been targeted by the Federal Trade Commission for deceptive practices. The FTC and state regulators have filed lawsuits against 54 such companies, charging that thousands of consumers have signed up for their health care insurance plans, but have not received the benefits promised.

According to the FTC, allegedly phony benefits include:

  • Discount cards
  • Discounts of up to 85 percent on medical services
  • Discounted prescriptions and more.

Consumers have complained that the discount cards were not accepted by providers as promised. In one case, a supposedly "discounted" prescription actually cost the patient more than it did without the card.

What you can do

As health care reform begins to take hold, confusion is bound to reign. More than ever, it's imperative that you practice due diligence when considering any health care plan. If something sounds too good to be true (for example, outrageously low premiums, deep discounts on thousands of providers, or pre-existing coverage before the law requiring it takes effect), well, use your common sense. Affordable health care is on the way, but don't count on finding it on an anonymous fax or a late-night TV commercial.

Megg Mueller
Megg Mueller is a journalist with almost two decades of experience. She has worked as a reporter and editor for the Reno Gazette-Journal and as an editor of health care and education manuals for Aspen Publishers, a subsidiary of Wolters Kluwer. She wrote a weekly column on the hotel industry during her tenure as assistant travel editor for USA TODAY.com. Mueller is the editor of a tourism-based website and also serves as a reporter for a weekly business newspaper.

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