Fraudulent Health Plans: 10 Warning Signs
In a previous post, Beware of Fraudulent Health Plans, I mentioned a prior client who had been left with thousands of dollars in unpaid medical bills after his health plan wrongly refused to cover his cancer treatment.
With the current debate in Congress over health coverage, this is an issue that may change greatly. However, at present, many people are searching for affordable coverage. Here is a good list from The Coalition Against Insurance Fraud of 10 warning signs that offered health insurance may be a fraud:
1. The coverage costs 25 percent or more below the norm, yet promises generous benefits and a large provider network.
2. The plan readily accepts people with serious illnesses and other medical conditions that other plans normally reject.
3. The insurance has few or no underwriting guidelines – the agent or rep appears almost too eager to sign you up.
4. You’re approached by an insurance agent, phone call or direct mail. Honest group plans are sold this way, but so are dishonest ones. Unless the plan is sponsored by your employer, verify that plans solicited by outsiders are licensed and legitimate.
5. The plan isn’t licensed in your state, and the agent (falsely) assures you the federal ERISA law exempts the plan from state licensing.
6. The plan seems like insurance, but the agent or rep avoids calling “insurance,” and instead uses evasive terms such as “benefits.”
7. The agent or rep doesn’t have clear answers to your questions, seems ill-informed, or avoids sharing information.
8. You’ve never heard of that health insurance company — and nobody else has, either.
9. You have to join an “association” or “union” to obtain the health coverage. But you get no voting rights, receive no bylaws or other material, and aren’t involved in the group’s activities.
10. Your hospital keeps calling you to complain that your health plan isn’t paying your medical bills. Often the plan’s reps keep making flimsy excuses, or stop returning phone calls altogether.
We've all heard the warning about things that sound "too good to be true." When it comes to health insurance, ignoring that warning can lead to devastating health and financial consequences.
