Health Insurance Scams: How to Spot, Report, and Avoid Them
Health insurance provides an essential safety net in our health care system. Unfortunately, there are people out there who will take advantage of our desire to be protected. They use scare tactics to obtain money and personal information from everyday people - especially those who are older. They know how confusing and intimidating the healthcare system in the United States can be, and use it for their own gain.
Anyone can be the victim of an insurance scam. In recent years, health insurance scams have become more and more sophisticated. Some even use the names and logos of real insurers.
Common Health Insurance Scams
One of the best ways to protect yourself from healthcare fraud is to understand the different types of scams. Below are a few of the most common ways scammers might try to trick someone out of their money or personal information.
Charging You for Help
Health insurance scammers might cold-call or text, or even email, claiming to be from your insurance agency and offer to help with your policy for a small fee. This is almost always a scam. The people who provide legitimate advice on purchasing insurance are not allowed to charge a fee.
If you get a random call, text, or email with an offer to help you navigate the health insurance marketplace, do not give them any personal or financial information. Instead, if you need assistance, contact your insurance provider directly or reach out to state-run assistance programs.
Medicare Card Renewal Fee
Many health insurance scams target older people, especially those who rely on Medicare. These scammers are often especially active during the open enrollment season. By calling Medicare beneficiaries and claiming some steps must be taken to get a new card, the scammer can obtain valuable information. They can even create fake caller ID information to make the call seem legitimate.
Remember: New Medicare cards are automatically mailed out to the address the government has on file. There is no fee. Anyone claiming otherwise is pulling a scam.
If someone threatens to cancel your Medicare benefits if you don't provide the personal or financial information they want, hang up and call 1-800-MEDICARE. They can help you ensure your Medicare benefits are in order and file a consumer complaint.
Fake Government Employees
Some health insurance fraud schemes will even have people posing as government employees. Similar to the IRS scams of the last few years, these people try to scare vulnerable folks into giving up personal information over the phone. They'll say, "I'm from the government." They're not.
They might even have fake "badge" numbers. They will try to intimidate you, saying if you don't follow their instructions, you might lose your insurance or even face criminal charges.
Keep in mind: The government agencies that work in the healthcare system do not generally call people. And they won't ask for credit card information, your Social Security Number, or bank information over the phone. Official correspondence will come in the mail.
Ambulance fraud scams often occur when someone poses as an insurance claims agent and creates unnecessary charges for transportation by ambulance. They may even file a fake claim for an ambulance ride that never happened to receive compensation. This type of scam often happens to Medicare recipients, who may need regular, non-emergency, transportation to a hospital.
If you suspect someone has filed a false ambulance claim, you can report it to the Department of Health and Human Services under the False Claims Act. You might even be compensated for doing so. However, to receive whistleblower compensation, you'll need to hire an attorney and file a legal claim.
Medical Identity Theft
Medical identity theft happens when someone steals your personal information and uses it to submit fake claims. Most often, they use stolen Social Security numbers or Medicare numbers. These thieves might also use other people's information to obtain prescription drugs.
Avoid these scams by:
- Carefully reviewing medical bills and statements
- Reporting suspicious charges
- Not giving out your SSN or Medicare number over the phone or email
- Be wary of someone who offers "free" health services but asks for your health plan information anyway
This kind of identity theft can not only impact your health insurance and your credit but it also often wastes taxpayer dollars. Keep a close eye on statements and avoid dealing with cold-callers to help keep your information safe.
Those who participate in health insurance fraud might try to entice you with discounts or "bundles" to get your information. But remember: If you didn't initiate the call, it's very likely that the person you're talking to is not from the insurance company.
Keep in mind: If a deal on medical services sounds too good to be true, it probably is.
Sometimes, scammers will go as far as creating a fake insurance company (or stealing the name of a real company) to sell counterfeit policies. They seem legit, often building websites that resemble actual companies or government sites. Sites that offer "alternatives" to comprehensive health insurance are often scams. The same goes for "health care sharing ministries."
If you're looking to buy insurance through the Health Insurance Marketplace, make sure you're on HealthCare.gov. Someone who tries to sign you up for a policy on a different site may be scamming you.
How to Avoid Health Insurance Scams
All of this might seem really scary. But luckily there are a few easy ways to make yourself a tougher target for health insurance scams:
- Research your insurance options
- Know your rights
- Make sure your identity is protected
- Never sign a blank insurance claim form
- Verify who you're talking to before offering personal information
Reporting Health Insurance Scams
If you detect a scam relating to your insurance, call your insurance company right away. They should have a process for reporting scams - after all, they're bad for business! You can also report insurance scams to government agencies that handle these matters.
The Federal Trade Commission accepts complaints relating to health insurance scams, as well as the National Health Care Anti-Fraud Association.
If a health insurance scammer obtains your financial or personal information, you may also have a legal claim. An attorney who specializes in health care issues can help you determine the best course of action.