Shopping for health insurance online? Before making your final purchase – read on. Health insurance scams have been preying on vulnerable consumers through websites selling medical discount plans.
According to the complaint in a recent case FTC settlement, IAB Marketing Associates, LP et al., was a sham nonprofit trade association offering memberships suggesting it would provide consumers with a comprehensive medical insurance plan. Here’s how it worked: people shopping for health insurance online would come across websites quoting prices for health insurance plans once they entered their personal information. The websites acted like collection baskets: they asked for contact information, age, occupation, marital status – and whether folks had health insurance or pre-existing medical conditions. IAB’s telemarketers then called people who provided their information on these websites and used aggressive tactics to sell IAB memberships. As long as people paid an upfront fee and made monthly payments – both ranging from $40 - $1000 – they were promised a comprehensive health insurance plan that covered virtually every medical procedure and illness.
Or so they thought.
The truth? According to the FTC, consumers never were enrolled in a comprehensive health insurance plan. The IAB plan was essentially a medical discount plan, offering, if it existed, limited discounts and reimbursements on visits to certain doctors or hospitals. Many consumers who suffered an accident or illness were shocked to find that their IAB “health plan” covered very few, if any, medical expenses, leaving them with major medical bills.
Here’s how to insure yourself against this scam:
- Be stingy with your personal information when you’re on the web. When a site asks for your personal information, know that the data you enter could end up in the wrong hands. A health insurance web site might look like the real deal, but many are fronts for criminals waiting to steal your money and personal information.
- Research a company before choosing to give it your business. Enter the company name and the word ‘complaints’ into an online search engine to see what comes up. And take the time to ask a company for the details – in writing -- on what you’re buying. If a company can’t provide the fine print, it could be a red flag.
- Check available resources to find out if the plan you’re buying into really is insurance. Your state insurance commissioner’s office can tell you if a plan is not insurance (and licensed in your state), and may be able to alert you to a scam. Find your contact at naic.org or consumeraction.gov.
If you suspect a health insurance scam, file a complaint online with the FTC, or call 1-877-FTC-HELP.
