Don't be Taken -The Price We all Pay For Health Insurance Fraud

There can be no doubt that individual health insurance can be expensive, and as more people are shopping for alternatives, when it comes to health insurance, it is important to know when a bargain isn’t a bargain. According to a report to congress issued by the General Accounting Office, (GAO) insurance fraud perpetrated on the public by bogus companies and companies not licensed to sell health insurance is on the rise. The study describes these unauthorized entities as companies that will sell health insurance policies to employers or individuals, will collect premiums from these employers and individuals, and then not pay out on all or part of the claims filed by those supposedly insured. In the two-year period covered by the study the Department of Labor found that the number of such bogus or scam companies that could be identified nearly doubled. The study found that these fraudulent companies left over 250 million dollars in unpaid medical bills, less than 25 % of which had been recovered one year after publication of the report.

Every State has on Insurance Regulatory Board or Commission. In addition to setting policy regarding premium rates, the primary responsibility of the State Board is to license insurance companies and make sure they are financially sound to pay off on the claims of the policies they have written. The so-called unauthorized insurers in this Report to Congress passed themselves off to consumers and state regulators as companies that for different reasons were not subject to State Regulations governing the sale of health insurance policies, such as by stating they were selling policies as representatives of a Trade Union, when no such Union as defined by law existed. 80 % of the companies identified as bogus in the report also purposefully and knowingly misrepresented Discount Health Plans as true health insurance. While there is nothing wrong with joining an organization or association to receive the benefits of a Discount Heath Plan, and for many this is a viable alternative to, or used in conjunction with medical insurance - passing such programs off as "health insurance policies" is fraud. Within the report federal and state officials and industry experts agree that the rising costs of healthcare and the pressure on individuals and employers, especially those with small businesses, to find affordable health insurance options have helped breed an environment in which less then scrupulous entities can thrive. So what can you do to protect yourself from buying a worthless policy form a bogus company?

• First of all any health insurance policy you are considering buying should pass the "sniff test" - you know like when you take a shirt out of drawer and give it a little sniff before putting it on - if any insurance policy seems to good to be true, go with your gut.
• The aforementioned State Regulatory Board. Any company authorized to sell insurance (not a discount plan) must be licensed by the state. Check with your State’s Regulatory Board for licensing and your State’s Attorney General for any complaints or problems
• Be weary of any company that asks for large or full premium up front and never pay cash.
• Be cautious of you do not leave with signed policy documents the day of your transaction or receive them soon after, or if the company does not offer you a 10 day trial period
• Ask for references from participating providers in the insurance plan, call several doctors on their list of providers and ask if there was ever any problems with payment or questionable coverage

If you suspect you are dealing with a bogus entity or have already been defrauded and purchased an illegitimate health insurance policy contact your State’s Insurance Regulatory Board, this can usually be found on the States Home Page, or you can check with the National Association Of Insurance Commissioners. (http://www.naic.org/)