With the nation's unemployment rate above 10 percent, many jobless people are falling prey to bogus health insurance plans.
Consumers victimized by such plans can be left with thousands in unpaid medical bills, stolen premiums or a discount card on prescription drugs and medical services, not insurance.
"So many people are desperate for affordable health insurance because of being laid off that they are falling prey to very sophisticated come-ons offering tremendous benefits, but delivering little," said James Quiggle, spokesman for the Washington-based Coalition Against Insurance Fraud.
"A lot of this started in the early 2000s with discount health-card offers, ads on TV and the Internet, and even signs offering health deals posted on telephone poles," he said.
The U.S Government Accountability Office reported 144 fake health insurers sold bogus policies to more than 200,000 people between 2000 and 2002.
That resulted in $252 million in unpaid claims. In that time period, fake insurers almost doubled operating under different names in diff erent states.
Quiggle said dubious health plans in the past two years have spread like wildfi re.
Those targeted include the unemployed, Latinos and small businesses, he said. But the elderly are especially at risk.
Carolyn Krebs has had her hands full this year trying to keep seniors from falling prey to bogus health insurance schemes.
Krebs, 65, is coordinator of the Apprise consumer-advocate program for seniors at Berks Encore, 40 N. Ninth St.
She's one of three full-time employees and 14 volunteers assigned to aid seniors with Medicare and state health insurance issues.
"We saw about 830 people in June, July, August -- the slowest part of our year -- and 80 percent of them had issues involving health insurance and prescription drugs," she said.
can be more costly than what a person is already entitled to under Medicare because of a low-income level.
"With Medicare insurance, things can get complicated and if you sign up for one thing, it may bump you out of what you had before."
In some cases, Krebs said, clients opted for health coverage because of its low premiums -- $200 to $300 a month
when a good price would be $600 monthly for an average health insurance policy.
But, she said, when it came time to use the policies, the person was hit with high deductibles or regular copays.
"Under these plans, a person could be charged as much as $2,500 deductible for a hospital stay and as much as $35 to $40 for a doctor's (visit) co-pay -- and that's high in the Medicare system where a co-pay may be only $10 or $15," she said.
Krebs said she has seen cases in which so-called insurance representatives wanted
Krebs said about a quarter of those seeking help are under the age of 65, often in their late 50s and early 60s, trying to cope with job loss and wrestling with maintaining some sort of health coverage.
Those over 65 are sometimes targeted by agents operating in the gray areas of insurance laws and taking advantage of confusion caused by changes in Medicare.
"We haven't seen as much out-and out scams, as people operating on the border; agents misrepresenting themselves to clients, (sometimes) even as Apprise representatives," she said.
Krebs said there had been instances where someone posing as an insurance agent would gain entrance to a Reading public housing facility for the elderly, selling prescription drug coverage that sounded better than it was.
"Sometimes they (agents) are telling people that what they are selling is better than what they have," she said. "It people to give them payment before they showed them a policy.
"That can be up to $150 to $250 up front," Krebs said.
And, like many other scams, health insurance fraud employs the Internet and the mail.
"We have only had a handful of complaints in Pennsylvania regarding bogus health plans and most of those involved mail or Internet-type solicitations," said Rosanne Placey, a state Insurance Department spokeswoman.
Consumers should always check to see if a company is legitimate and licensed to do business in the state, she said.
Typically less expensive than legitimate policies, fraudulent medical plans usually promise much but provide insuffi cient coverage, or none at all.
"If it sounds too good to be true, it likely is too good to be true," she said. To see more of the Reading Eagle, or to subscribe, go to http://www.readingeagle.com. Copyright (c) 2009, Reading Eagle, Pa. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
Copyright (C) 2009, Reading Eagle, Pa.