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 (under-65 and Senior) are bought and sold daily, especially through robocalls. Fake and deceptive scams such as this are common in the medical industry, and we show you how to avoid getting ripped off and identify persons that are preying on confused customers.
Fake plans have also robbed many consumers of millions of dollars, and non-refundable application and enrollment fees. High-pressure sales tactics and claims that you are receiving a call from a government employee are common situations. If answers to your questions are evasive or vague, go elsewhere. Recorded voices on calls should be treated cautiously. Typically, government agencies (including the Social Security Administration and Department of Health And Human Services) do not contact consumers by phone.
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, Medicare, 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. Although several of these discount options are reputable, they should not replace standard Senior products. Your pharmacist may be able to recognize unreliable drug discount cards.
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. Often, these fees range between $100 and $250, and must be paid in addition to the policy premium. And the plans
Seniors Are Especially Targeted
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.
Although an email is helpful when receiving coverage details, a hard copy sent in the email should be also available. Email phishing scams attempt to lure the email recipient to open an unsafe attachment, or reveal personal financial information. Social security numbers, passwords, credit card and checking account information are common items requested. Expiration dates and balances on credit cards are information that is commonly requested, but never should be provided.
Also, often phone calls are masked, and the caller ID may not show the actual caller. It’s not unusual for a phone number to be “spoofed,” which gives the appearance that the caller is a nearby business or local resident. The caller is likely located outside the country, and will franticly attempt to obtain your credit card or checking account information. Stealing money and personal information is the only goal of these scammers. They are not offering legitimate insurance products.
Several of the most common Senior scams are Medicare/medical plans, internet fraud, cemetery, final expense, and funeral schemes, investment schemes, reverse mortgage and home refinancing, lottery, and investment-related schemes. Medical discount cards and home medical alert systems are also common methods that Seniors are targeted.
Medicare workers do not call consumers requesting their personal ID number, social security number, checking account information, credit card information, or personal financial information. If contacted by phone and informed that you will forfeit benefits if a specific product is not purchased, hang up and contact a local office.
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. Links should only be forwarded to reliable well-known websites.
A website with a url beginning in “https” is generally very secure (the “s” stands for secure), and encrypted for your safety. Data is more difficult to be used illegally with the “https” designation. The connection becomes more secure from the web server to the browser. By reviewing the content of the website, you can help determine if it is legitimate. For example, is the content fresh and updated?
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, although they are not eligible for a federal subsidy.
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 Oscar that offers coverage in many states. When you encounter companies that you 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. 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. These types of policies can leave huge gaps in benefits when a large hospital claim is filed. Daily limits may be placed on covered in-hospital expenses, outpatient benefits, and prescription drugs.
Also, if your policy and/or identification cards are not received after several requests, immediate action should be taken. When medical bills are not promptly paid, the policy may not be legitimate. Although delays of up to six weeks should not be alarming, delays of more than two months could indicate more serious issues with the company.
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. These fees may range from $75-$250 and are usually non-refundable.
The FBI Scams and Safety Division investigates common fraud schemes such as medical equipment fraud, Medicare and Medicaid fraud, unperformed services, and rolling lab schemes.
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. None of the information they spew is correct, and they do not have access to your retirement benefits.
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. You can also visit or call a local office for clarification.
The Federal Trade Commission (FTC) offers recommendations when you receive a suspected fraudulent call. Hang up, don’t give out personal information, and report the call to the FTC Complaint Assistant. Common complaints involve imposter scams, fake checks, prizes, lotteries, and sweepstakes, romance scams, unsolicited emails, job offers, multi-level marketing, and pyramid schemes.
Recently, a billion-dollar scam involving telemedicine and durable equipment companies was discovered and broken up. Unnecessary knee, shoulder, and back were prescribed to Medicare patients, with the government paying the entire cost. Many physicians were paid for the prescriptions with bribes and kickbacks, while telemarketing offices in Latin America aided in the illegal activities and broad corruption.
What Should Never Happen When I Apply For A Policy?
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. Often, an applicant purchases a policy with the promise that the details will be mailed, emailed or faxed. However, the policy details are never provided, and communication with the company becomes almost impossible. Phone calls are not answered and the physical address of the company is not local.
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, determine if a tax subsidy applies and how to obtain it, and then calculate the difference between a Bronze and Silver policy.
Just as importantly, you should never pay any person, entity, company or “navigator” to assist 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. Professional help is available at no cost, and several free government-funded programs are available. Experienced brokers routinely provide free advice.
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, other than policy deductibles, coinsurance, and copays. Although selected policies may have “association fees,” the cost should not be significant.
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 occurs, 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. Therefore, act as quickly as possible to avoid additional monies being deducted from a pre-authorized account. Any additional requests for money by the specific company should be rejected and reported to the most appropriate authority. Checking accounts and credit card accounts should be monitored to ensure unexpected withdraws or charges are not made.
Contact The Bureau of Consumer Protection
Also, you can contact the Bureau of Consumer Protection (Part of the FTC), which is a federal agency designed to protect consumers. Many of the complaints and instances of fraud and unfair business practices they handle have been discussed in this article. They are a very trusted resource for free advice and initiating an investigation, if needed. Senior and under-65 complaints are investigated at no cost to the consumer.
Divisions of the Bureau include: Privacy and Identity Protection, Advertising Practices, Consumer and Business Education, Litigation Technology and Analysis, Marketing Practices, Consumer Response and Operations, Financial Practices, and Enforcement.
Filing the complaint does not necessarily guarantee lost funds will be recovered, but other victims may benefit in the future. Lawsuits may be filed on your behalf, and often refunds are granted. Complaints can be submitted online or by phone. Data is compiled and reviewed with other Agency data to determine the most appropriate action to be taken. Several of these Agencies include the Better Business Bureau, internal Revenue Service, and the Consumer Financial Protection Bureau.
Health Care Provider Fraud
Although not common, a health insurance company, hospital, or physician’s office can commit fraud or engage in questionable practices. Examples of possible illegal activities include billing for more expensive services than were actually performed, completing unnecessary services for financial reasons, billing for items or work that was never utilized or performed, paying bribes or kickbacks, charging a patient a larger copayment or coinsurance for covered services, and changing a diagnosis to justify additional testing, procedures, or surgery.
Higher premiums and larger out-of-pocket costs directly impact consumers. Medical identity theft can result in wrong medical treatment, terminated benefits, and erroneous records on consumer’s medical history. An increased risk of death or injury can also result from this type of identity theft. Often, it takes years to fully erase erroneous records from major credit bureaus.
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.