Health Insurance

How To Avoid Health Insurance Fraud

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Expensive medical care partnered with loss of time from work can result in high medical bills that people struggle to pay back. Health insurance is essential in financially protecting yourself and your family from the strain of any unexpected medical emergencies.

Unfortunately, scammers and fraudsters are aware of this and use whatever tactics necessary to separate hard-working Americans from their savings. Below you’ll find information on how to spot a scam and what to do if you find yourself caught in a scammer’s web.

Common Health Insurance Scams

Insurance fraud and scams tend to peak around the open enrollment periods of the year. For Medicare, that period is from October 15 through December 7, and for the Health Insurance Marketplace it’s November 1 through December 15.

During that timeframe, shoppers tend to be overwhelmed by choices, and while it’s understandable, it makes it easier for scammers to take advantage of them. Some common healthcare scams include:

COVID-19 Scams

Be wary of people who stop by your home or call you over the phone asking for any personal information in exchange for COVID services or support. This can include anything COVID-related, such as offering masks or tests, and even offering to provide financial relief from the economic strain brought on by the shutdowns and business changes.

Only purchase COVID tests from trusted stores and healthcare providers as some scammers will sell counterfeit tests to people desperate for answers. Additionally, don’t believe someone who claims that you received an overpayment of your stimulus check and demand repayment on the spot.

Other scams include “testing sites” that require financial or personal information before, during, or after administering COVID tests, strangers selling proof of vaccination cards, or anyone offering you anything COVID-related in exchange for personal or financial information.

Medicare Scams

For this type of scam, a Medicare recipient might receive a call from someone claiming to be from the Government’s Medicare office. They may claim that the recipient’s Medicare services are about to be canceled or that the recipient has to pay to receive their updated cards in the mail. Scammers will also pretend to be from the Medicare Part D sector and try to switch recipients over to a new plan to cover their prescription costs.

If someone calls you out of the blue claiming any of these things and follows up by asking for payment or your social security number and other private information, treat it as a scam and hang up.

Some scammers may also go door to door to sell Medicare coverage, and while legitimate agents may come to your home to go over paperwork and answer any questions, none will stop by without your request or consent first. If you would like to double-check services, call the Medicare office directly at 1-800-MEDICARE.

Discount Plan Scams

Discount plans are packages that are billed monthly to reduce the costs of certain healthcare services that may not be included in your overall healthcare plan, such as packages for vision, dental, or chiropractic services. While they’re not a replacement for health insurance, these plans or programs are used as a way to bring down the overall costs of services.

For this type of scam, the plan will be expensive with very few discounts given overall. Some scammers will also use vague language, including using “up to” a certain discount amount when very few services in the plan include discounts that high.

Make sure to check that your service provider is included in the plan before paying to enroll. Some states require that legitimate discount programs carry licenses just like individual agents, so double-check with your state to see if the agencies are listed in the database. Most importantly, give yourself some time to research and decide on the plan that will suit your needs.

Red Flags for Medical Insurance Fraud

Fortunately, scammers and fraudsters tend to follow the same basic formula when it comes to extorting money from people, which makes them easy to identify. Here are some red flags to look out for in interactions:

They Call Claiming To Be From the Government

If the US Government needs to get in touch with you, they will either send you a certified letter via mail, or they’ll show up at your door. They will never call you directly and threaten you with any type of action, and will never ask for your personal information, like your social security number or your bank information, over the phone. 

They Employ Scare Tactics

Anyone who contacts you and tries to threaten or intimidate you into giving them money is an automatic red flag and should be treated as such. Reputable insurance agents and companies will never bully you.

They Ask For Personal Information

Never give your personal information to anyone who calls you out of the blue or shows up on your doorstep. If someone calls to talk to you about personal information and you aren’t sure if they’re legitimate, hang up and call them back using a number you trust, which can be found on the back of billing statements, insurance cards, or on the company’s website.

They Request Payment

Do not give your payment information to anyone who calls you out of nowhere or shows up at your door whom you did not previously coordinate a meeting with. An insurance agent will never demand payment to avoid criminal proceedings.

How To Protect Yourself Against Scams

Whenever working with an agent over the phone, it’s always a good idea to have a notepad nearby to jot down a few details that you may need to reference later. Either way, take some time to do your research before binding service over the phone.

Insurance scams can be scary, but thankfully, there are many ways to verify that you’re working with industry professionals in order to protect yourself and your financial assets:

Verify That Your Company or Agent Is Legitimate

A few direct questions to ask your representative are as follows:

  • What is your agent number?
  • What is your license number?
  • What is your physical address?

These questions are usually enough to deter a scammer, but jot down the answers to double-check later just in case. Each state has its own online database where they keep the names and license numbers of all of the insurance agents in the state. These websites will also list whether the representatives have active licenses at that time or not.

Write down the representative’s phone number and double-check the database with the agent’s name and license number before handing over any financial information. Type the physical address into an online search engine to make sure it’s a real place. 

Demand Clear Answers

Ask specific questions about the plans you’re shopping for, including details about co-pays, deductibles, and in-network versus out-of-network providers. If the representative dodges the questions, sends you to find the answer yourself on a brochure or website, or dances around the answers, consider this a red flag. A true healthcare representative should be able to answer these questions for you directly. 

Familiarize Yourself With Your Existing Coverage

This step is easily overlooked but it’s vital in finding out who is a legitimate insurance provider and who is a fraud. Becoming familiar with your personal plan will make it harder for scammers to pull the wool over your eyes with fast talk once you start asking them specific information that they should know as an insurance provider.

Your Medicare coverage doesn’t change much from year to year unless you change the plan yourself. Someone that calls stating that your plan is changing significantly and demanding payment to make up the difference is a red flag.

What To Do if You’re a Victim of Health Insurance Fraud

If you feel you’ve been the victim of a health insurance scam, know that you’re not alone. You’re not the first one to fall victim to their lies but with your help, you can be one of the last. In the event of a scam, take the following steps to reduce the damage as much as possible:

  1. Reach out to your bank as soon as you can to dispute any charges to your account from the fraudulent company. This will also put them on notice of identity theft targeting your accounts.
  2. Reach out to your local law enforcement to report the scam. They may then have you contact the Attorney General of your state for follow-up questions and to give a statement.
  3. Contact the Federal Trade Commission and fill out the complaint assistant online
  4. Report Medicare fraud to 1-800-MEDICARE or on medicare.gov.

How To Report a Suspected Health Insurance Scam

Reach out to your local law enforcement via the non-emergency line in your area. Also, report the scam to your state’s Department of Insurance. Reporting scams and forming a paper trail for the authorities to follow can make all the difference when it comes to catching and prosecuting the perpetrators. Getting the word out to the proper authorities also makes it harder for the scammers to catch someone else in the same trap. Law enforcement and the FTC will give you all the steps to follow in reporting the fraud.