From time to time, different types of scams crop up, swindling innocent Americans out of their hard-earned money. Now, the FBI is warning consumers about another emerging threat — discounted health insurance schemes.
Reports about this new scam scare are steadily rising in numbers, with victims confirming losses of millions of dollars.
These surging rackets couldn’t have come at a worse time, especially considering the uptick in health care costs and living expenses (largely driven by inflationary pressures and tariff woes).
Unfortunately, it’s in times like these that consumers become more vulnerable to fraudsters and their deceptive schemes. Building awareness is the only way to protect yourself and loved ones from falling prey to them.
In this article, we delve into the growing threat of health insurance scams and discuss effective steps for tackling them.
The Latest Wave of Health Insurance Scams: What You Should Know
Medical insurance fraud that targets regular consumers typically involves fake or misleading health insurance plans.
An example is when someone gets you to sign up for a policy that doesn’t exist and tricks you into making an upfront payment. Bad actors could also mimic a legitimate insurance company and phish for your personal or financial information (like social security numbers, current policy details, and bank account information), which they could use for countless other scams.
The schemes the FBI warns about relate to fraudulent medical discount plans. This is where shady insurance agents provide heavily reduced rates (often coupled with free coverage for certain services and other attractive limited-time offers) to tempt you into buying insurance on the spot.
When you first sign up, it might seem like a great deal. But things will start to crumble when you eventually submit a medical claim.
Many of these dubious insurance schemes don’t even cover regular treatments, although they mislead policyholders into believing that they do.
They often slap victims with hidden charges, as well (like a one-off processing cost or an extra monthly fee that wasn’t conveyed explicitly at the beginning).
In certain scams, insurers have lied about covering the policyholders’ current health care providers. They’ve also deceived people by promising a refund for cancelling their existing policy (when signing up for the new one).
By the time customers find out the truth, the damage has already been done.
When the insurer rejects a medical claim, policyholders are forced to pay for health care out of pocket. And it’s hard to challenge a policy when they’ve already put their signature without reading the fine print (which is usually where shady insurers place critical information they don’t want you to know).
Cancelling the policy isn’t easy, either: In many scam cases, insurance companies provide next to no instructions on this, nor do they respond when policyholders contact them.
Here’s How to Tackle Medical Insurance Scams
Sometimes, the red flags are pretty obvious when you come across a racketeer. But often, it’s hard to tell for sure whether you’re dealing with a fraudster or a genuine insurer.
Here’s what to do in instances like that.
Check Whether It’s a Reputable Business
There are several ways to verify who you’re communicating with.
Your state insurance department can help you identify registered insurers and their licensing details. The National Association of Insurance Commissioners website is an excellent resource for finding complaints against insurers and other critical information. The Better Business Bureau and independent online reviews are also useful for discovering legitimate companies.
What if a scammer contacts you disguised as a genuine insurance business? You can often get to the bottom of it by reverse searching their contact details. For instance, you can look up their phone number on Nuwber to see the real name of the person reaching out to you and their other information. If the details you find don’t match what the caller told you, rest assured you’re dealing with a con artist.
Avoid Hasty Decisions
Taking your time to assess policies is crucial when choosing health insurance. Remember, changing from one health insurance plan to another can be costly. Things can get even worse if you sign up for a hoax. Therefore,
- Go through the price quote and other documents in detail to understand what you’re getting into. Pay attention to the fine print and ask questions if you’re unclear.
- Never agree to pay without verifying facts.
- Do your own research by comparing competitor policies, fees, and terms.
- Contact your medical providers and ensure they accept the policy.
- Be suspicious when insurers offer discounts and benefits that seem too good to be real. Walk away if they pressure you to sign up then and there or request payment in full for the entire year to benefit from a steep discount.
Don’t Divulge Sensitive Personal Information
Sometimes, health care scammers can come after your identifiable data, so they could target you and others for further swindles. For example, they could trick you into disclosing your current medical insurance policy information in the guise of arranging a refund when you switch to their new plan. This is a form of medical identity theft that allows fraudsters to use up insurance benefits by impersonating the policyholder.
To avoid such scenarios, make sure you keep your SSN, Medicare number (the unique 11-digit identifier on your Medicare card), patient ID number (assigned by your healthcare provider), personal financial information, and similar sensitive data safe.
Practice Digital Security
Why is this important? Phone calls aren’t the only medium that deceptive health insurance agents could reach you on. They can use emails, messaging apps, social media DMs, online ads, popular forums, and many other ways to find prey for their deceptive schemes.
But when you strengthen your digital security hygiene, you can often detect and avoid such fraudulent attempts. Essential practices for this include using VPNs, installing virus guards, and avoiding links in unsolicited emails, messages, and ads. Educating yourself about different techniques scammers may use to trick you, like spoofed websites, social engineering, and deep fake endorsements, is also vital. And from time to time, clean up your digital footprint so you don’t leave around breadcrumbs that can make you an easy target.
Report Scams
If you fall victim to a dubious insurance scheme or manage to evade one at the last moment, you must report the incident to the relevant authorities. This will help draw attention to emerging swindles, trigger investigations, and generate awareness among the public.
The FBI suggests raising a complaint with its Internet Crimes Complaint Center about internet-related deceptive activities. You should also contact your local law enforcement agency and the Federal Trade Commission.
When the scam is initiated on a specific platform (say, a messaging app or social media), alerting the relevant organization is essential, too. Don’t forget to notify your bank if you’ve approved a payment or shared financial details with a swindler.
To Conclude
When health care costs continue to rise, scammers have a field day duping consumers in search of affordable medical insurance.
These bad actors could get you to pay for a hoax policy that doesn’t exist, tie you to a plan using misleading information, or steal your credit card number, SSN, and other PII, which they could sell or use for financial fraud.
To protect yourself from a medical insurance scam, it’s important to confirm the authenticity of the insurer, take time to assess all the policy details, keep your sensitive information safe, and practice digital security hygiene. And if you ever get caught in an insurance swindle, report the incident and alert all relevant parties to curb the damage.
FAQ
What type of health insurance scams are common in the U.S.?
Most medical insurance fraud, like Medicare scams, is designed to defraud insurers by making false insurance claims using policyholders’ medical ID data. Discounted insurance policy scams that target consumers are also becoming prevalent now.
Who can fall for a health insurance scam?
Anyone can become a victim, especially during open enrollment periods. However, older adults as well as those experiencing financial difficulties (for example, due to loss of job or a serious illness) are more susceptible to falling for fraudulent health insurance schemes.
How can I identify medical phone scams?
Some of the common warning signs include vague information and pressure tactics like steep discounts and free giveaways for a limited time. Fraudsters will also try to phish for identity-related details or get you to make upfront payments (usually using untraceable methods like wire transfers).
Is there a way to stop shady health insurance agents from calling me?
By registering your number with the National Do Not Call Registry, you can prevent telemarketers (such as insurance salespeople) from contacting you via phone. Installing a caller ID app is also useful for detecting and blocking spam and scam callers based on numbers flagged by other app users.
What should I do if a scammer calls me?
The first thing to do is to disengage. If you know for sure it’s a fraudulent call, simply hang up and block the number. When unsure, it’s best to take down information and verify it independently with a trusted source before calling back. And remember to safeguard your personal details, such as your SSN and financial account numbers.
About the author
Chief Technical Officer at Nuwber
With nearly two decades of experience in the IT industry, Eugene possesses comprehensive knowledge across his professional field, including in data management, data protection, and information search. Through his writing, he aims to provide valuable insights and practical advice on how to safely explore the online environment and leverage digital tools to enhance people’s lives.
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