It was reported last month by USA Today that bogus health plans advertising comprehensive coverage at bargain prices are on the rise. These scams result in desperate consumers paying for policies that won’t cover their medical bills. In recent weeks, there has been an increase in activity by the state insurance departments. For example, The Alabama Insurance Department has warned Alabama citizens about these scam artists. Missouri regulators have cracked down on 13 companies; California has ordered firms to stop selling misleading and unlicensed health discount cards; and Tennessee regulators have seized a company they allege has collected more than $14 million from people across the country – then left them with unpaid bills. Other states are also getting involved. Insurance Commissioners are saying they have never seen anything like this. James Quiggle, spokesman for the Coalition Against Insurance Fraud, which represents consumers and insurance companies, had this to say:
There’s high unemployment, health premiums are expensive and tens of millions of people have no health coverage. This is an ideal breeding ground for scams.
Among 37 insurance bureaus responding to a coalition survey last fall, 57% reported increases in health plan scams. The nation’s new health care law may actually encourage more scams that prey on public expectations for expanded coverage and misrepresent the changes, Secretary of Health and Human Services Kathleen Sebelius warned in letters sent to states last month. Among the groups regulators are targeting:
A good example is an ad by HealthcareOne that featured an image of the White House and the words: “Healthcare Alert! Daily registration limits have been established for all Americans seeking affordable access to healthcare. Register now for immediate acceptance.” Cindy Ehnes, director of the California Department of Managed Health Care, said the ad capitalized on the national health care law then pending in Congress.
State insurance regulators are advising consumers to check with their offices before buying health plans. Hopefully, the companies responsible for the scams will be dealt with in the most severe method available. We have too many problems with healthcare issues to allow companies to cheat consumers who are looking for help.
Source: USA Today and Montgomery Advertiser
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