A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

August 2, 2021

HEALTH INSURANCE SCAMS

Courtesy AARP

Searching for the right health insurance plan can feel like navigating a maze, with bewildering coverage and cost choices around every turn. Shady operators count on that confusion to sell insurance products and health services that deliver far fewer benefits than promised — or none at all.

These schemes proliferate when health care is in the news and on our minds. The coronavirus pandemic has brought robocalls and phishing emails peddling bogus “corona insurance” supposedly covering COVID-19 treatment.

 Scammers get busy during the annual open enrollment periods for Medicare and Affordable Care Act (ACA) plans. (Medicare open enrollment is Oct. 15 to Dec. 7. The ACA period is Nov. 1 to Dec. 15 in most states; a few have expanded sign-up options during the pandemic.)

Fraudsters try to convince you they have a simple solution to the complexity and expense of obtaining coverage. They cold-call potential marks or generate leads through websites, using paid advertising to get to the top of search results, and claim to offer “comprehensive” health plans that meet “Obamacare” or “Trumpcare” requirements.

The resulting policies turn out to be, at best, far skimpier than advertised and at worst outright fakes. Often, victims really are buying substitute medical discount plans, in which consumers pay a monthly fee to get reduced prices on specific services and products from participating health care providers. Some discount programs are legitimate, but as the Federal Trade Commission (FTC) warns, they are not a substitute for health insurance.

During ACA enrollment, scammers impersonate representatives of the government-run health insurance marketplace. They’ll tell you they need personal information to verify an application or that they can help you choose the right plan — for a fee. Treat such solicitations and any offers of deep-discount coverage with skepticism.

Warning Signs:

*High-pressure sales pitches that push low-cost plans or offer special rates if you sign up right away.

*Claims that a plan is licensed under ERISA, the federal Employee Retirement Income Security Act. Insurance companies are licensed by the states, not by any federal body.

*A plan requires you to join an “association” or “union” to get covered. These may be fake organizations designed to create the illusion that you are buying group health insurance.

*Someone contacting you about health coverage claims to be from the government. No government representative will ever try to sell you insurance.

Do’s:

Do compare rates. Premiums for comprehensive coverage that are far lower than what you see elsewhere are probably not valid.

Do confirm with your state insurance commissioner that a plan provider is licensed.

Do insist on seeing a statement of benefits or a complete copy of the policy.

Do learn the difference between medical discount plans and health insurance. The FTC offers guidance. Before signing anything ask specific questions to make sure you know what you’re getting.

Do research an association or union named in an insurance pitch. Look for a US street address and phone number, and for evidence of activity other than selling health insurance.

Do check out an unfamiliar company that says it sells plans through a major insurer such as BlueCross/BlueShield. The affiliation should be confirmed with the big-name insurer.

 Don’ts:

Don’t enter personal information on a website in exchange for a price quote. You would likely be setting yourself up for identity theft or a barrage of sales calls.

Don’t keep talking to a sales agent who gives vague or evasive answers to coverage questions or tells you the details are “in the brochure.”

Don’t sign up for a plan if the bar for acceptance seems too low — for example, if you are not required to get a physical or provide a medical history. Some scam sites claim you can get insurance just through filling out a form.

Don’t give bank, credit card or personal information, or make a payment, in exchange for assistance in getting ACA coverage. Help navigating the health insurance marketplace is available free. Go to HealthCare.gov and click “Find Local Help.” Real health insurance marketplace representatives will not ask you for personal or financial data.

More Resources:

HealthCare.gov, the official Affordable Care Act website, has information on preventing and reporting suspected Health Insurance Marketplace scams.

If you suspect a health insurance scam, file a complaint with the FTC, http://www.ftc.gov online, or by telephone at 877-382-4357, or call the AARP Fraud Watch Network Helpline: 877-908-3360