How To Avoid Health Insurance Schemes, Scams, Fake Plans, And Fraud

Have you ever been  a victim to a health insurance scheme? Perhaps you lost money and submitted a large hospital claim and very little (or none) of the bill was paid. Unfortunately, fraudulent medical plans are bought and sold daily. Scams such as this are common in the medical industry, and we’ll show you how to avoid getting ripped off. Fake plans have also robbed many consumers of millions of dollars, and non-refundable application and enrollment fees.

Do You Need Coverage?

Perhaps the first important point to consider is if you need healthcare coverage. If your employer provides group benefits or you pay separately for a private plan, AND you are satisfied with the price and coverage, quite simply, stay where you are and discontinue the shopping process. If you are covered through Medicaid or a subsidized federal plan, it is important to ensure your household income still qualifies for the same rate and benefits. Otherwise, changes may have to be considered.

If you are receiving Medicare benefits, a Senior Supplement or Advantage plan may help reduce out-of-pocket expenses, but it it is not mandatory to purchase a policy. Part D prescription drug plans are also offered to persons that own Supplement plans or Advantage contracts without drug benefits. “Discount” coverage is also provided by many sources, with no cost to the consumer.

However, if you are  currently without coverage or are not completely satisfied with your existing policy, then you need to continue reading. This includes anyone that has recently purchased, or will be enrolling in a Marketplace health plan through your state or federal Exchange. If you missed the Open Enrollment deadline, you may be extra susceptible to questionable plans that feature large non-refundable application fees.

Seniors should also be wary of  phone calls, solicitations, and emails from unrecognized or seemingly unreliable sources. Strangers that appear at your home with insurance “advice” or “information” are not the type of visitor that is likely to help. Any person (solicited or unsolicited) that asks for credit card or checking account information before providing specific plan details (in writing) should be ignored.

Where Do I Go To Shop For A Policy?

There are many safe places. Naturally, our website is one of the most highly respected resources in the industry. When “surfing” online, it’s critical to select a website that has rich accurate content that is written by the owner(s) of the website. If you notice that proper punctuation and grammar is lacking, it’s very possible that many of the articles are written by someone outside of the US with limited knowledge of health insurance plans.

How To Avoid Health Insurance Scams

We’ll Research Healthcare Plans For You

Also, check the freshness of the information on the website. Are they posting about outdated plans. Are there recent discussions of changes in the industry, such as State Health Exchanges and “The Affordable Care Act.” If not, it may be best to “x out” and find a more reputable resource. Marketplace plans change every year so it’s important for a website to continuously provide current pricing and Obamacare legislative updates. “Off-Exchange” plans can also be considered.

How Do I Determine If The Insurer Is Legitimate?

Of course, if it’s a “name” company, such as Blue Cross Blue Shield, Cigna, Humana, UnitedHealthcare, or Aetna, there’s no need to investigate further  regarding their legitimacy. But you may not be as familiar with smaller regional carriers such as  SummaCare in Ohio or Amerigroup that offers coverage in 13 states. When you encounter companies that you simply don’t recognize, check their rating with either A.M. Best Co. or Standard & Poors, or view the carrier’s “Complaint Ratio,” which is often found online. Of course, at your request, we will always furnish that information.

It’s  also worthwhile to check for “disclaimers” on a website or hard copy that discloses that the product being sold is actually not insurance. It may be a combination of discounts or negotiated pricing packaged with other items instead of an actual healthcare contract from a licensed insurer.

Another concern is the presence of any type of mysterious “application fee.” Generally, unless it is a temporary policy, these extra costs are a sign that the plan offers very limited benefits, is not an ACA-approved contract, and may not be eligible for federal subsidies. If you submit a claim for a large medical expense, your out-of-pocket cost may be alarmingly high.

What Are The Most Common Medicare Scams?

Replacement of your Medicare ID card is one of the most prevalent schemes. You may receive a call (occasionally an email or letter in the mail) requesting that you order a replacement card due to changes in recent legislation (Obamacare). Of course, this is completely untrue since the Affordable Care Act (ACA) does not impact Medicare benefits.

Typically, you are asked to furnish your social security number and other personal financial information so the new ID can be processed and sent. If you don’t comply, you are informed that your benefits could be terminated or interrupted. Of course, none of the information they spew is correct.

It is very unusual for the government to contact you by phone regarding your existing benefits. Almost always, it is via email or regular mail. Regardless what the caller ID may say (they can easily be masked), it’s best to contact  Medicare (and Medicaid) directly by phone if you suspect fraud.

What Should Never Happen When I Apply For A Policy?

Healthcare Fraud And How Not To Be A Victim

You Should Be Able To Review Your Policy In Writing

You should never apply for coverage without reviewing (in writing, either online or hard copy) a copy of the policy benefits and the actual application. Too many times we have heard nightmare situations where an applicant bought a policy with the promise that the details will be mailed, emailed or faxed. That’s NOT the way its supposed to work.

Certainly, you would not purchase a refrigerator or a car without inspecting the product. The same theory applies to buying health insurance. When purchasing a policy through a State Exchange, it is much simpler to use our website (or another reputable resource). Why? Because after you have received your free quote and perhaps decided to apply for coverage, most consumers do not want to navigate through a three-page application, figure out if a tax subsidy applies and how to obtain it, and then determine the difference between a Bronze and Silver policy.

Just as importantly, you should never pay any person, entity, company or “navigator” to assist you in applying or buying medical coverage. There are no exceptions to this rule. Whether it’s a nominal fee of $5 or a charge of hundreds of dollars or more, there is no justification that warrants you paying for that type of service.

There are instances where you will be asked to “contribute” for this type of assistance. If that occurs, it’s time to immediately terminate communications with them and allow us or another reputable entity to help you. Other than the policy premium, you should not pay any other plan-related expenses.

If I Am A Victim Of A Health Insurance Scheme, Then What?

If that occurs, and assuming you have payed money, immediately block any checking accounts or credit cards from the company or or individual that has duped you. Often, however, it is a marketing agency or independent brokerage firm that can hopefully step in and assist the process. Contacting your State Department Of Insurance (DOI) is also highly recommended, especially if any fraudulent activity is suspected. And of course, rescinding the policy and securing a full refund should be requested in writing.

Usually, when this situation happens, it is a “no-name” company that does not have a local office. Although a website is available, contacting their office may be a challenge. For this reason, act as quickly as possible to avoid additional monies being deducted from a pre-authorized account.

Also, you can contact the Federal Trade Commission (FTC), which is a federal agency designed to protect consumers. many of the complaints and instances of fraud they handle have been discussed in this article. They are a very good trusted resource for free advice and initiating an investigation, if needed.

Latest News:

June 2015 – Healthcare fraud cost Americans more than $80 billion last year. Over-billing or fictitious billing of Medicare services was one of the largest reasons. Whether it’s for services never performed, or charging for products that were never received and/or never ordered, the problem shows no signs of slowing down.

Once a person’s Medicare number is obtained, it’s much easier for a thief or unscrupulous company to bill the government, and quickly receive reimbursement. Of course, consumers should never readily provide their ID number or social security number to any person that calls on the phone. Reviewing the quarterly Medicare notice  will also  help alert you to possible fraudulent activity.