Catastrophic health insurance scams are not new. Scams have been around since health insurance began, and scammers are now taking advantage of the current state of the economy. According to the Coalition Against Insurance Fraud, Americans spend approximately $2 trillion dollars a year on health insurance. $68 billion of this amount goes to insurance fraud. If you are interested in purchasing catastrophic health insurance, make sure you understand how to tell the real thing from a scam.
Signs of a Catastrophic Health Insurance Scam
It can be extremely difficult at times to identify a catastrophic health insurance scam. Here are some tips that may make it a bit easier though.
- Hard To Understand Paperwork- Many fake catastrophic health insurance companies don’t want their policies to appear immediately fake. For this reason, they make their explanation of benefits very difficult to understand so policy holders aren’t sure what medical bills they must pay for and how much their insurance really covers. The paperwork is so confusing sometimes individuals don’t notice that the word “insurance” can not be found anywhere. Be careful when purchasing any type of insurance; make sure you are really covered before you sign on the dotted line.
- Automatic Coverage- Scam companies often guarantee you coverage no matter what. For this reason it is important to research information about catastrophic health insurance before you purchase a policy. Your research will inform you what type of coverage you can expect from this type of insurance. This will help you identify when an offer of insurance sounds a little too good to be true.
- Low Cost- The best part about catastrophic health insurance is its low monthly premiums and high deductibles. However, if the cost is too low, this may help you identify a scam. Average deductibles for catastrophic health insurance range from $1500 to $3000. If the deductibles are lower than this, you may want to do a little more research on the company and see if you are being ripped off.
- Cash Up Front- Some fake companies ask for premiums to be paid up front for the entire year in cash. This is one way these companies avoid being traced by fraud bureaus. A real insurance company will offer you several different payment options and will usually allow for monthly premiums.
What Do You Do If You Are Caught In A Catastrophic Health Insurance Scam?
The most important step you can take if you find yourself caught in a catastrophic health insurance scam is reporting it as soon as you can. Contact your state’s attorney office to see if your state has its own fraud bureau. You can also find a list of names, numbers, and addresses for states with their own fraud bureau on the Coalition Against Insurance Fraud’s website, located at www.insurancefraud.org/fraud_bureaus.
You can also contact the National Insurance Crime Bureau at 1-800-835-6422. It may also be helpful to get in touch with your state’s medical board and chiropractic board to let them know a scam has been committed. Make sure you are ready to give these individuals as much information as you can. You may need to provide:
- Type of scam that was committed
- Date of the scam
- The name, address, and phone number of the insurance company who committed the scam
- Names of the individuals involved in the scam
- Documents of your “insurance” and other necessary paperwork
Catastrophic health insurance scams can become a big problem if you don’t know how to properly identify them. Make sure you research every company before you decide to buy a policy.
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