The Federal Bureau of Investigation (FBI) issued a nationwide warning regarding a discounted medical insurance scam that has defrauded individuals out of millions of dollars annually.
These misleading or fraudulent offers promise significantly reduced rates on legitimate medical insurance plans but ultimately fail to provide any actual health coverage, according to a statement from the FBI.
Medical insurance scammers often target individuals seeking affordable healthcare options, employing misleading tactics like falsely claiming to be real medical providers, pressuring people to sign up quickly due to time limited special rates or promising free services with hidden fees to lure people in to sign up.
These discounted medical insurance scams begin with unsolicited contact via calls, texts or emails from unknown businesses offering special deals or discounted medical insurance, FBI said.
Already a few states have reported these fraudulent schemes.
In Washington, authorities issued a cease-and-desist order against a discount medical insurance company after receiving over 100 complaints of fraudulent practices.
The company misrepresented their plan coverage options and did not cover medical costs, which left beneficiaries paying out of pocket in full for medical costs they have been led to believe would be at least partially covered.
Washington residents impacted by the scam did not receive refunds after cancelling their insurance plans as the false company had promised. Additionally the company made unauthorized charges to the victims’ bank accounts and conducted business under multiple names.
Pennsylvania residents have also fallen victim to the scam. In one instance, a couple reported being pressured to sign up for a discount medical insurance plan they believed was offered by a national provider, according to the release. They were urged to act swiftly to secure a temporary discount.
Following an emergency room visit and doctor’s appointment, the couple received an explanation of benefits revealing that they were responsible all medical bills as their policy did not provide coverage.
Another Pennsylvania resident was contacted by an individual claiming to be a healthcare representative who offered a much cheaper plan than his current one. He was promised a refund for his existing plan upon enrollment in the new one but never received any information about it.
This individual was also pressured to act quickly to secure a significant discount, the FBI wrote. After purchasing the new plan, he received neither the promised refund nor any communication from the new insurance company.
Similar incidents occurred in Texas. One person responded to an advertisement offering assistance with gasoline and groceries for senior citizens. He was told that he had to sign up for a dental policy with a specific insurance company to obtain the aid. After he signed up and tried to cancel the dental insurance policy, he was told by customer service to request the cancellation via email.
The insurance company did not respond to his emails requesting to cancel his dental insurance policy and he had to cancel his credit card to stop the charges.
In Maryland, a man was told he would save thousands of dollars by purchasing a health insurance policy and paying for his entire year up front. He was told the new policy would cover his current medical providers and hospitals and that he would only be responsible for a $20 co-pay for doctor’s office visits and $50 per urgent care care visit.
After needing emergency surgery, the hospital told him that they did not accept his new health insurance and that he was responsible for a surgery cost of $7,000, according to the press release.
To keep residents safe from these scams, the FBI offered the following advice:
Always ensure the medical plan offered is from a reputable source and that the company is licensed to operate in your state. The state insurance commissioner or the Better Business Bureau can help verify the plan. Verify with current providers that they accept the insurance plan you are considering. If policy documents are not sent, this could be a red flag. If documents are sent, review them and pay close attention to the fine print. Understand exactly what is being offered before committing to anything.Don’t pay anything upfront. Be cautious if a company asks for large upfront payments or is pressuring you into making quick decisions.Do your own research. If the plan seems too good to be true, then it probably is.
Fraudulent activity can be filed and reported with the FBI’s Internet Crimes Company Center. Reporters should identify the information about the company and or healthcare provider who sold the fraudulent medical insurance to them including the name, phone number, address, email address and website.
