10 Warning Signs

Watch for these warning signs of a possible swindle…

1. The coverage costs 25 percent or more below the norm, yet promises generous benefits and a large provider network.

2. The plan readily accepts people with serious illnesses and other medical conditions that other plans normally reject.

3. The insurance has few or no underwriting guidelines – the agent or rep appears almost too eager to sign you up.

4. You’re approached by an insurance agent, phone or direct mail. Honest group plans normally are sponsored by your employer — and aren’t sold directly to individuals.

5. The plan isn’t licensed in your state, and the agent (falsely) assures you the federal ERISA law exempts the plan from state licensing.

6. The plan seems like insurance, but the agent or rep avoids calling “insurance,” and instead uses evasive terms such as “benefits.”

7. The agent or rep doesn’t have clear answers to your questions, seems ill-informed, or avoids sharing information.

8. You’ve never heard of that health insurance company — and nobody else has, either.

9. You have to join an “association” or “union” to obtain the health coverage. But you get no voting rights, receive no bylaws or other material, and aren’t involved in the group’s activities.

10. Your hospital keeps calling you to complain that your health plan isn’t paying your medical bills. Often the plan’s reps keep making flimsy excuses, or stop returning phone calls altogether.

The price you pay

You foot the bills. You must pay all medical bills yourself. Many people ended up paying hundreds or thousands of dollars out of their own pockets — including critical treatment such as kidney transplants, chemotherapy and eye surgery.

People have spent their life savings, sold their homes, gone into debt, wrecked their credit and disrupted their lives.

Health endangered. Your health also could be in danger. Some people have delayed urgent medical care – threatening to make their illness worse.

Finance crooked lifestyles. And what happens to your stolen premiums? The crooked plan’s owners spend your money on mansions, vacations, jewelry, large salaries and other luxuries.

How the scams work

You’re contacted. An insurance agent or other rep may try to sell you group health insurance at rock-bottom prices. You may also receive slick marketing material in the mail, or see enticing ads.

Typically you’re promised premiums up to 50 percent below normal — plus superior coverage and a large, convenient network of skilled medical providers.

Coverage too easy. The insurance also is easy to obtain — too easy. You need few or no medical exams or medical questionnaires. And you can sign up even if you already have an illness or injury for which other plans turn you down. You may simply have to join an association or union and write out a premium check.

No licenses. The agent or rep also falsely insists that federal law exempts the plan from state licensing (in fact states do require licenses). It’s an amazing deal — and phony.

No insurance. You have no health coverage or provider network. Your insurance company is fake, and the “association” exists only on paper.

Your premium money is being stolen.

Scam Alerts from Coalition Against Insurance Fraud

Con artists are selling phony group health coverage to small businesses and consumers who are looking for lower-priced insurance to beat today’s skyrocketing premiums.

These scams are operating in nearly every state. They’re stealing millions of dollars from people across America. These swindles can leave you dangerously uncovered when your medical bills need paying — and your health is on the line.

You could be next. Here’s what you should know….

* How the scams work
* The price you pay
* 10 warning signals
* 4 ways to protect yourself

Some people go to great lengths to commit vehicle insurance fraud, says Ray Albertini, special investigations director for Progressive, the third-largest auto insurer in the U.S.

A common type of fraud is buying insurance coverage after a vehicle has been damaged. Less common is when someone tries to buy it at the scene of an accident.

That was attempted by a motorcyclist who had wiped out. While lying on the side of the road with a ruptured spleen, he had the presence of mind to call 1-800-PROGRESSIVE to buy coverage.

He didn't know a witness overheard the call. Busted! But a lot of scam artists get away with it - and it costs society in general.

"Most insurance companies base their rates on the cost of doing business," says Albertini. "When costs go up because of fraudulent claims, other customers end up paying the price."

Here are other fraud cases from Progressive's files:

*A couple's car caught on fire. While he was on the phone with Progressive buying a policy, his wife was overheard yelling that the car was about to explode.

*Two brothers were hired to torch a car and make it look like an accident so the shady owner could collect insurance money. They doused the car with gasoline and - to make sure it was completely destroyed - tossed in a pipe bomb. The ensuing explosion set one of them on fire. His brother rushed to his aid. He caught fire, too. He flagged down a state trooper - en route to investigate the smoke - confessed, then died. So did his brother.

*A man reported parts stolen from his car. To support his claim, he submitted photos. Investigators thought they looked odd, then realized they were close-up pictures of a toy car.

*A woman crashed her boyfriend's motorcycle. She wasn't hurt. But her boyfriend, afraid his insurance wouldn't cover damages caused by a driver not on the policy, claimed he was driving. Figuring he needed injuries to bolster his story, he tied himself to a truck and had a friend drag him around. He got the desired injuries. But his girlfriend ended up telling investigators what really had happened.

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