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Health Insurance Scams - How To Avoid Fraud This Open Enrollment

Agnus Smith | Published: June 14, 2018

Black glove stealing scamming

Under President Trump, Open Enrollment 2019 is going to see some dramatic changes this year, which will hopefully benefit you and your family. Unfortunately, there, with new rules and regulations, there will be new health insurance scams out there waiting to take advantage of the unsuspecting. Make sure you don’t become a victim this Open Enrollment Period by learning to identify a health insurance scam when you see one.

What Are Health Insurance Scams?

Health insurance scams are just like any other scam. In most instances, victims are offered fake health coverage for a discounted price. The unfortunate part about health insurance scams is they are not always caught soon enough. Health insurance only kicks in once you need medical attention, so if you are paying a premium, it could be months, or even longer before you realize that the coverage you have doesn’t cover you at all.

Types of Health Insurance Scams

The world of health insurance is pretty complex, so it is easy for people to become prey to fraudsters looking to exploit the innocent. Luckily, if you are well equipped with information, you can defend yourself against all types of fake health insurance plans and policies. Here are a few well-known health insurance scams for you to watch out for.

Fake Health Insurance Policies

Some con artists will go all out to create seemingly legitimate health insurance companies. They usually win people over with promises of low premium payments and comprehensive health coverage. These criminals pull out all the bells and whistles to create the illusion that they are authentic, so make sure you verify the plan you are purchasing is real before spending any money.

Trust your gut when it comes to purchasing health insurance. If it seems like it’s too good to be true, it just may be. Thanks to the internet you can look for reviews on the company, and see what others are saying. If you are still unsure, you should always check with your state department to verify the policy you are thinking about purchasing isn’t a fake.

Universal Health Cards

Obamacare, more formally known as the Affordable Care Act, provides health insurance to may who previously couldn’t afford it. However, don’t be fooled into thinking the US has adopted a full Universal Healthcare, or Single Payer system.

Some of these criminals are looking to cash in on Obamacare by claiming they need your information for your Universal Health Card or National Health Card. This is essentially identity theft, and these people will call their victims and get their social security numbers and bank account numbers.

If you receive one of these calls, know it’s a scam. There are no Universal or National Health Cards, so make sure not to fall victim to this trick.

Medical Savings or Discount Cards

Another high profile scams are medical savings or discount cards. This scam is so prevalent that states like California and Massachusetts are going on the offensive against these cards. Typically, these medical savings cards claim to eliminate the need for health insurance by providing discounts for all your medical needs. The sellers of these cards tend to target those with lower incomes with false promises of saving money.

If you ever see these medical savings cards, be wary. They often list fake health providers and inflate the cost of services to promote “higher discounts.” There are legitimate health savings cards, but you will be able to tell. If the company offering the card doesn’t give you the list of providers upfront, run the other way. Always ask for the list of providers, and from there you can make calls to verify the card you are purchasing is real.

The sellers of these cards may also try to get your personal information. Just make sure to do your research, if it’s a scam there is a high chance that others have already taken to the internet to warn others.

Red Flags

If you are looking for health insurance make sure to watch out for some of these red flags:

  • Ask for your summary of benefits. All reputable health insurance companies will be able to easily provide this for you so you can read it over. If you notice anything suspicious in the language, or discrepancies from what your agent or broker told you, make sure to have someone else look it over for you.
  • Every legitimate health insurance company will have an online presence, not just paid advertisements. If you go to research your potential health provider and can’t find reviews, a website, or any trace of the company online, it may be a scam. You can also check your state department to find out if the company is listed.
  • They don’t give you a policy number, or the policy number they give you is fake. If you can’t verify your policy number, then more than likely you are being sold a fake plan.
  • If the person you are talking to isn’t licensed or is overly aggressive about getting your personal information, it may give you a bad feeling. Most transactions are now done over the phone, or online. However, if the person you are talking to asks for your social security number or credit card number before even discussing your policy with you, it would be worth some additional research, or requesting to speak with a manager.
  • All health insurance companies are licensed at the state level. If you are talking to someone who brings up the Employee Retirement Income Security Act of 1974, or ERISA for short, or that they are licensed at the federal level, don’t believe them.

What to do if You Were Scammed

If you are someone who fell victim to a health insurance scam, you are not the only one. It is estimated that millions of Americans are scammed each year when it comes to health insurance. If you were one of the millions make sure to cancel your policy immediately, and contact your state department. Also take to the web to document your experience, because you can end up helping others from making the same mistake you did.

It will never hurt to be overly cautious when it comes to buying health insurance, so make sure to do your research and trust your gut. If a health insurance plan seems too good to be true, it may be. If you can’t find any trace of the health insurance provider online, or your physician’s office hasn’t even heard of it, it may be best to try another option.

Finding Credible Health Insurance Plans

If you are in need of health insurance, you can begin your health insurance search through the health insurance marketplace, or use reputable price comparison sites. First Quote Health is a good place to start because it makes it easy for you to find a health insurance agent that is licensed in your area by simply entering your zip code.