Health insurance is something every American should have, but navigating the healthcare marketplace can be overwhelming. Scammers are all too aware of that and look for any loopholes in people’s knowledge that they can exploit in order to sell fraudulent “plans” to people.

Health insurance scams are especially prevalent in the open enrollment period for Medicare and health plans or during a crisis like the current coronavirus pandemic. They can take many forms, and aren’t always as obvious as you might think. Here, we’ll go over some of the more common health insurance scams people fall victim to, and tell you what you can do to avoid them.

Common Health Insurance Scams and Red Flags

As technology evolves, scammers have upped their game. There are several ways in which they try and dupe people out of their money. In 2018 just one company stole millions from people looking for healthcare coverage according to the Federal Trade Commission (FTC) which handles consumer fraud complaints. A few of the most prevalent are:

• fake websites promising unusual discounts on insurance plans,

• robocalls or live calls from fake sales agents, and

• door-to-door salespeople claiming to be from “the government” and authorized to sell insurance.

Fake websites can be especially dangerous. They don’t always look shoddy and often incorporate the logos of legitimate organizations. A good way to figure out if a website is a scam is to look at it closely. Scroll to the bottom of the page and look at the copyright. What company is it? Have you heard of them? If a search reveals nothing or reports of a scam, steer clear. These websites will often require you to enter personal information in exchange for a quote. Don’t take the bait. If you give them that information, you’re setting yourself up for a barrage of sales calls and possible identity theft.

Robocalls are another big problem. The tracking website YouMail, which has been logging robocalls since 2015, records 5.2 billion robocalls placed just in the month of March 2019. Almost half those calls were scams: just over 47%. Scam calls will leave an urgent-sounding message designed to scare the potential victim into calling. If someone should call back the scammer on the other end of the line will say they work with “the government” or “the law,” and demand payment.

Lastly, if anyone comes to your home uninvited and tries to sell you health insurance, don’t listen to them. No one from the health insurance marketplace will come to your door unsolicited.

Television ads and mailers with offers of low-cost health coverage, no deductibles, and free medical apparatus like back and knee braces are other common methods scammers use to glean personal information from consumers. Check these offers very carefully; more often than not, they’re a scam. That supposed low-cost health care plan is likely to be a discount plan dressed up as coverage, or a fake plan that provides no coverage at all.

New Health Insurance Fraud Trends - Coronavirus

COVID-19 Health Insurance 

One of the most common coronavirus-related health insurance frauds involves scammers calling or emailing victims with "special offers" for COVID-19 health insurance. They claim this full-coverage insurance will cover the costs associated with COVID-19 treatment or preventative care. This is a lie. Scammers just want to steal personal and financial information from victims. 

Canceled Health Insurance

With this type of fraud, scammers call or email victims and say a loved one is sick with COVID-19 and claim the victim's health insurance has been canceled, for one reason or another. The scammer will try to convince the victim to reinstate their health insurance coverage so the loved one can receive treatment. 

Free Tests/Testing Kits

A growing number of scammers claim people can get viral/antibody tests or home testing kits for free or that they can claim them on their existing health insurance. It's important to note that the government has implemented free testing kits, but make sure that you are going through the newly created covid.gov website to order your tests, or you can purchase rapid/at-home testing kits at your local grocery store.

Do not answer phone calls offering free testing, as these types of scammers are trying to steal the victim's identity or money. 

Medicare Cards

There has been an increase in the number of scammers offering people Medicare cards in exchange for a fee. As many Americans worry about the medical costs associated with the virus, scammers are exploiting the current crisis. Remember, Medicare cards are free of charge, no matter what scammers claim. 

Did you know that click-through rates on email phishing scams have increased from 5 percent to more than 40 percent since the start of the coronavirus?

How to Protect Yourself When Shopping for Health Insurance

If a health insurance package sounds too good to be true, it probably is. Just like with the other health insurance scams in this article, there are some red flags to look out for if someone contacts you about coronavirus or any other suspicious health insurance offer:

• Someone asks you to verify your name, contact details, or financial information. 

• Someone asks you to pay money via PayPal or wire transfer. 

• Someone contacts you late at night or early in the morning.

• Someone calls you from an unknown number. 

• Someone emails you from an unusual email address. 

• Someone becomes aggressive or abusive when you tell them you are not interested in their product or service. 

• Someone claims you have carried out health insurance fraud or another crime. 

The best way to find a health insurance plan is to use a legitimate insurance broker like PolicyScout. Never, ever pay someone to help you get coverage, or to receive a Medicare card. These services are provided free of charge. Should you choose to contact a representative, take down their full name and agent ID number. You can search that information on your state insurance commissioner’s website to make sure they’re legitimate.

When speaking with a representative and deciding on a plan, ask them for a full explanation of benefits. If the person you’re speaking with won’t provide one, they aren’t a legitimate agent. Do not trust someone who tells you a service usually costs more, but that they know how to bill Medicare so you won’t have to pay for it.

Once you’ve chosen a plan, make sure to go over your statements carefully. Whenever you use your benefits, you’ll receive an ‘explanation of benefits’ document listing the services provided, when, and by whom. Go over this and make sure that everything matches up correctly to avoid billing fraud.

What Type of Information Do Scammers Want?

Scammers want information that will give them access to your personal information, leaving you exposed to various types of fraud. This information includes:

• Names, addresses, dates of birth, and other personally-identifiable data for identity theft purposes 

• Social Security numbers

• Medicare numbers

• Credit card/debit card numbers

• Bank account numbers

Who Do Scammers Target?

There's a misconception that scammers target the elderly, vulnerable, or people who have limited or no health insurance. This isn't the case at all. Scammers will try to deceive people of all ages and backgrounds. Most of the time, they have no information about the person they are calling or contacting via email. However, they pretend they know the recipient. 

Scammers are exploiting peoples' fears, and many of them are successful. As Americans worry about their health insurance coverage (or lack of it), this problem will continue.

Did you know that every year in the United States, one in 10 adults falls victim to some kind of scam?

What To Do If You Suspect Fraud

If you suspect you’ve been contacted by a scammer or fallen victim to a scam, there are several agencies you can contact. If you suspect a scammer is local, you can also contact your local police department. You can also report fraud to the Health and Human Services Office of the Inspector General at 1-800-HHS-TIPS (1-800-447-8477) or TTY: 1-800-377-4950.