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How can I avoid scam health insurance companies?

health insurance companies that are a scamThere are an increasing number of insurance companies offering fraudulent or scam health insurance coverage to unwary victims. You can avoid becoming a victim of these companies by being cautious and taking your time when shopping for coverage. Then, take the time to read your policy. Finally, check with your state resources to assure that the company is licensed. Don’t allow yourself to be pressured into enrolling in a policy.

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With so many Americans now unemployed, the number of uninsured has risen. Many people who have lost their insurance coverage are looking for any avenue possible to cover their healthcare expenses. With such a need for healthcare coverage, fraudulent insurance companies are popping up all around.

Are there scam health insurance warning signs?

There are warning signs that you can look out for that may hint you are working with a fraudulent company. Pushy salespersons with false deadlines are not normally representative of valid, reputable companies. Beware of any tactics such as limited enrollment, limited-time, or overuse of terminology from the recent Health Care Reform act to bolster his sales pitch. If you are speaking with an agent, you should be comfortable dealing with him. If not, you need to show him the door.

Many insurance companies hide behind great looking websites. Don’t be drawn into a scam by fancy bells and whistles. Also, don’t be fooled by an impressive company name. As with an agent, you can verify the legitimacy of Internet companies. Again, take your time and look for warning signs. If a site seems vague, doesn’t provide answers to all your questions, is slow to respond (or even too quick to respond), beware.

How do scam health insurance companies work?

scam health insurance companiesA bogus health insurance company will offer more than it can deliver. Be sensitive to the hype. You could end up with limited coverage, or worse, no coverage at all. Be cautious of medical discount cards. These cards are not part of a health insurance plan. They are, rather, just what they say they are, discount cards.

According to The Money Coach, the FTC recently shut down one fraudulent company that scammed customers by claiming to offer comprehensive coverage. This company even extended benefits to people with pre-existing health conditions. How did this scam work? The victims were required to pay a one-time enrollment fee and then hefty monthly premiums (in the neighborhood of $1300).

Clients thought they were paying for medical, dental, vision, and prescription coverage but were actually only paying membership fees to a discount program. Many customers realized they were not getting anything for their money, and tried, unsuccessfully, to cancel. The company already had their credit card information on file and simply ignored their cancellation requests.

Who is especially vulnerable to insurance scams?

Certain groups of people are considered to be especially susceptible to health insurance scams.  These include those who are strapped for money, those who are elderly, and those for whom English is not their first language.

  • Unemployed: Unemployed health insurance is hard to come by. With the downturn of the economy in the past few years, many Americans have lost their jobs and the healthcare coverage that accompanied it. Desperate to replace their coverage, the unemployed are highly vulnerable to fraudulent health insurance companies.
  • Elderly: The elderly are often targets for insurance scams. The baby boomers are now reaching retirement, which means they may be facing a loss of health insurance coverage through their employer. As this number of retirees increases, so will the scams targeting them. This segment of our population is huge and offers a breeding ground for unscrupulous companies.
  • Immigrants: The number of immigrants in America is increasing rapidly making them prime targets for insurance scams. Companies capitalize on the communication barrier and a simple lack of understanding to victimize this group of people.

Where can I find more information on how to avoid scam health insurance companies?

For individuals and business professional, the Coalition Against Insurance Fraud is an excellent source for information pertaining to scams and how to avoid them. This coalition is great because it recognizes consumers and companies. The site provides several useful links to other resources as well.

Health insurance scams are big news right now. Fortunately, state and federal government agencies are aware of the upswing of these companies and are taking actions to identify and take action against them. In April 2010, USAToday reported that:

  • Missouri had lowered the boom on 13 companies
  • California had put an end to the sale of many health discount cards
  • Tennessee had actually seized a company that had scammed people across the United States out of over $14 million and left them with nothing but unpaid bills

Are you looking for online health insurance but want to avoid scam insurance companies? Enter your ZIP code now to obtain quotes from reputable insurance companies.