Health Insurance News – Current Scams!

Health insurance news is ramped with the word ‘fraud’. As a consumer you hear the word daily in your reading, no matter the subject. However, health insurance has topped the scam list as the new health care reform legislation has been passed. It is important for consumers to become aware of these issues to avoid such scams.  

Now that the health care legislation is law, fraudulent marketers are out in force. Some of the typical fraudulent tactics being used are blast faxes, telephone marketing, and knocking on doors. One of the more sophisticated means of deception is where a fraudulent insurance company actually sets-up a storefront in a community. These companies sell policies, issue health insurance cards, collect premiums, and file bogus claims. It’s not very long before the company vanishes and the victim is left with hefty medical bills. These companies look extremely professional with very professional sales materials.

Everyone likes a discount and with discount cards for “memberships” being very popular, the insurance criminals have jumped on the bandwagon. Several of these discount cards do actually provide discounts on some expenses such as prescription drug costs and dental services through a network of providers. However, some of the unscrupulous marketers are overstating the size of the networks, or offering unbelievable discounts—sometimes up to 85 percent. 

Oftentimes, discount cards only work at certain health care providers and only cover a fraction of the cost.  The cards may cover $500 in hospital fees a day but if a person has a $5000 procedure done, the consumer is left with a huge bill.

The unsuspecting consumer is drawn into the plan on the falsehood that the discount card will pay for major medical expenses. Hospitals are reporting that people are coming to the hospital, for admittance or emergency care, and presenting their discount card for health insurance purposes.

As people are confused over the passage of health care legislation, criminals have been able to persuade consumers to purchase these fake health insurance plans.  Consumers should become aware of these criminal activities and check with the Department of Insurance to make sure a company is licensed to sell insurance.