Scammers exploit confusion over health care overhaul

WASHINGTON — In Winfield, Kan., south of Wichita, a man who claimed to be with "ObamaCare" recently visited an elderly woman to talk to her about the new health care law.

In reality, he was an insurance agent who just wanted to get in the door to try to sell her a policy.

In suburban St. Louis, a man who said he was with the government was going door to door to sell "ObamaCare" policies.

Reports out of Idaho, Illinois, Vermont, New York, Alabama and elsewhere around the country tell similar stories.

"We're always getting some kind of scam," said Darrell Elliott, a Medicare fraud specialist with the Kansas Department on Aging. "Now we're getting ones related to health reform."

Indeed, scam artists are working overtime. They're hawking fake insurance policies by preying on the fears and confusion that surround the nearly $1 trillion program, health care and consumer advocates said.

For the record, there is no government health insurance program called ObamaCare, and federal employees aren't out selling it door to door or by telephone.

Health care fraud experts say that if you hear that kind of pitch, shut the door, hang up the phone, then call your state insurance department or Better Business Bureau.

"You've got the perfect storm for people to be taken advantage of," said Kim Holland, the Oklahoma state insurance commissioner and co-chair of the Antifraud Task Force for the National Association of Insurance Commissioners.

"The economy being what it is and health care so expensive, people are finding it difficult to afford medical care, and they are persuaded by low-cost plans," Holland said. "You've got these really unscrupulous people, and they are savvy in identifying the people who're most likely to be persuaded."

Older people are popular targets. Fraud experts said they were generally more polite and would listen to a salesperson. They're also less likely to report being scammed, out of embarrassment or fear that their independence might be taken away.

One scammer was so bold that he even dropped by an elderly community center to try to lure customers. The supervisor "shooed him away and nobody fell for it," Elliott said.

Some scammers have set up toll-free phone lines, and they warn their prospective customers that there's a "limited enrollment" period — not true — for the new health insurance program, so they better act quickly.

In Mobile, Ala., Tina Waller, the president of the Better Business Bureau of South Alabama, said a woman reported that a man said he was "part of the government health care program. They told me they had a few spots left and needed my bank account number."

Idaho residents have gotten robo-calls that claim to offer health insurance for the entire family for $3 a day — regardless of pre-existing conditions — plus free vision and dental coverage.

Some scammers use the health care overhaul's fix to the "doughnut hole" in the Medicare prescription-drug program as a device to steal. The law provides beneficiaries with $250 checks this year if they hit the coverage gap in the drug program, which kicks in when their costs are high enough.

"Scammers are calling and saying, 'I am with the government and I need to send you your $250. I need to see your bank account,' and they will access the account that way," said John Breyault, the vice president for fraud policy at the National Consumers League.

Breyault said that because the law required people to buy health insurance or pay a penalty, scam artists laid on the pressure, telling potential customers, "You need to buy this health insurance or you will be violating the law."

Even before President Barack Obama signed the bill last month, health insurance fraud had been increasing, according to a survey last fall of 37 states by the nonprofit Coalition Against Insurance Fraud. Bogus health plans were the No. 1 reason for complaints.

Few consumer or health insurance groups are surprised that the new health care law has become a rip-off tool. The changes it's triggered are complex, and making things up is easy.

" 'ObamaCare' is one of the catchwords," coalition spokesman James Quiggle said. "It has enough gravitas right now to convince people, 'Better buy up or else.' "

The same thing developed when Medicare began the prescription drug program, known as Part D, and scam artists tried to sell phony discount cards. It happened as well with Medicare Advantage, which enables clients to receive their benefits through private insurance instead of from the government.

Scammers also tried to peddle fake medicine during the swine flu outbreak last year.

Health and Human Services Secretary Kathleen Sebelius said in a speech this month that her agency was cracking down on health care fraud. In a letter, the former Kansas state insurance commissioner also warned state attorneys general and insurance officials to be on the lookout.

"Unfortunately, scam artists and criminals may be using passage of these historic reforms as an opportunity to confuse and defraud the public," she wrote. "Consumers should beware."


  • Never buy health insurance advertised as "ObamaCare" or based on a suspicious piece of mail, flier or ad.
  • Never respond to a high pressure — "buy now!" — sales pitch.
  • Never give a salesman your bank account, credit card or Social Security number.
  • Never buy a policy online, over the phone or without any promises in writing.
  • Never buy a policy without verifying whether physicians, hospitals and other providers associated with it are legitimate.
  • From the National Consumers League, founded in 1899.


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