Recently the FBI issued a warning about scammers posing as health insurance companies offering phony discounted medical insurance. They contact their targeted victims by phone, text messages and emails. Many of these scams target older Americans. It is easy to get lists of the names of older people, who, as a group, are significant users of medical services and are responsive to offers for discounted medical care.
Often what the scammers are selling is not medical insurance, but medical discount programs.
For example, in 2018 the Federal Trade Commission sued a Florida based company, Simple Health Plans LLC, its owner, Steven J. Dorfman and officers on charges that Simple Health Plans scammed unwary consumers out of more than a hundred million dollars through the sale of misrepresented insurance plans. The FTC obtained a temporary restraining order from a federal court in Florida shutting down the company while the litigation against it proceeded. The plans sold by Simple Health Plans were represented to be comprehensive health insurance plans that covered pre-existing conditions, prescription drugs, primary and specialty care treatment, inpatient and emergency hospital care, inpatient and emergency hospital care, surgical procedures, as well as medical and laboratory testing, however, the truth is that the plans were not even health insurance, but merely relatively worthless medical discount programs that effectively left consumers uninsured and facing large medical bills while charging as much as $500 per month for the plans. In many instances, the scammed consumers were lied to and told that the plans would cover their medical bills without any copayments or deductibles. In order to make the plans look legitimate, Simple Health Plans falsely used logos of legitimate health insurance providers such as AARP and Blue Cross Blue Shield although they had no connection with these legitimate companies. In 2024 FTC was awarded a final judgment against the company in which Simple Health Plans LLC was ordered to pay 195 million dollars to be used to refund victims of the scam and was also permanently banned from selling any healthcare products.
TIPS
Choosing and purchasing medical insurance can be confusing and difficult. Before purchasing any policy from a company with which you are not familiar, you should check with your state insurance commissioner’s office to find out if the company is properly licensed and truly selling insurance rather than a worthless discount plan. For this information you can go to http://www.naic.org or www.consumeraction.gov. It also is helpful to do an online search using the company name and the words “scam” or “complaint.”
You can also go to healthcare.gov and state marketplaces where you can get trustworthy information to compare plans, coverage and prices.
Never sign up for any insurance without seeing a complete copy of the policy.
If the salesperson says the plan is through a major insurer, check with the company they claim to be associated with to see if this is true. It is easy to counterfeit fake logos and marketing materials.
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