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Health Insurance Scams Targeting Small Businesses

Armen Hareyan's picture

The WallStreet Journal on Sunday examined the increasing number of smallemployers and individuals "searching for affordable health insurance"who fall "victim to scams and misleading offers." According to MilaKofman, a Georgetown University associate professor who has studiedthe issue, more than 200,000 small businesses and U.S. residents since 2000have purchased fraudulent health care plans and were left with hundred ofmillions of dollars in unpaid medical claims.

Telemarketers also have begun targeting seniors by selling fake Medicareprescription drug plans and Medicare Advantage policies, according to KimHolland, commissioner at the OklahomaInsurance Department.Holland saidsome telemarketers use the calls as a ploy to collect private data for identitytheft. Meanwhile, fake group policies for small businesses and their employeesoften are "pitched through unsolicited faxes," the Journalreports.

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Medical discount cards also are "sometimes misrepresented as insurance byunscrupulous agents and Web sites," according to the Journal.While legitimate discount programs can offer discounts of 5% to 25% or more onservices from a list of in-network providers, some illegitimate programs do nothave many providers in their networks or do not provide the promised discounts.

Holland said,"It is amazing how long these things can go on before regulators areadvised of them," adding, "Until people complain, we don't know"(McQueen, Wall Street Journal, 11/18).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.