Health insurance scams are on the rise - Industry Watch - Brief Article

Healthcare Financial Management, Oct, 2003

The United States is experiencing" a new wave of health insurance scams, spurred by rising healthcare costs and increasing numbers of uninsured, the Commonwealth Fund reported in August. (See also "Careful: The Health Insurer Near You May Be a Scam" on page 26 of this issue,) The nation has seen two previous influxes of phony health insurance (once after ERISA was enacted in 1974 and once during the double digit premium increases of the late 1980s and early 1990s), but the current crisis is the most severe. Since 2001 four of the largest unauthorized plans have left nearly l00,000 people, mostly small-business employees and self-employed people, with about $85 million in unpaid medical bills and without healthcare coverage. Florida and Texas have been particularly hard bit.

Companies selling phony insurance collect premiums from enrollees but fail to pay healthcare providers. If in doubt about the legitimacy of a patient's health plan, contact the state insurance regulator to verify whether the company is authorized to sell health insurance.

To read "Health Insurance Scams: How Government Is Responding and What Further Steps Are Needed," go to www.cmwf.org/media/releases/ kofman665_release08282003.pdf.