Scam Artists Using Health Insurance Reform Passage
to Sell Fake Insurance Policies
HHS Secretary Kathleen Sebelius sounds alarm, sends
letters to state officials
April 7, 2010 – It did not take the scam artists
long to take advantage of the new health insurance reform legislation.
HHS Secretary Kathleen Sebelius said yesterday they are already one the
phone and door-to-door selling fake insurance policies.
The warning from Sec. Sebelius was part of a speech
she delivered entitled, “Health Reform and You: How the New Law Will
Increase Your Health Security” at the National Press Club.
In her remarks, Sebelius notes that some scam
artists have attempted to capitalize on the new law by setting up 1-800
numbers and going door to door trying to sell fraudulent insurance
policies.
Sebelius said she had sent letters today to State
Insurance Commissioners and Attorneys General asking them to investigate
and prosecute these scams.
In the letter to the attorneys general she said,
“Scam artists and criminals may be using the passage of these historic
reforms as an opportunity to confuse and defraud the public. Media
accounts indicate that fraudsters have gone door to door selling phony
insurance policies. Some have attempted to make dishonest profits by
urging consumers to obtain coverage in a non-existent ‘limited
enrollment’ period that they falsely claim was made possible by the new
legislation.”
Below is the text of the letter to the attorneys
general.
“The passage of health insurance reform legislation
is truly historic and promises to improve health care for all Americans.
Reform will provide coverage for more than 30 million uninsured
Americans, improve the quality of care, strengthen Medicare for our
seniors, give families the peace of mind that comes with quality,
stable, secure insurance, and reduce the federal deficit.
“Unfortunately, scam artists and criminals may be
using the passage of these historic reforms as an opportunity to confuse
and defraud the public. Media accounts indicate that fraudsters have
gone door to door selling phony insurance policies. Some have attempted
to make dishonest profits by urging consumers to obtain coverage in a
non-existent “limited enrollment” period that they falsely claim was
made possible by the new legislation.
“These types of scams are unacceptable and threaten
Americans across the country. Sadly, they are not new. For example,
during the height of the H1N1 flu outbreak, some attempted to market
phony flu treatments. We are determined to stop dishonest individuals
who are working to defraud the American people, no matter what their
pretense.
“At the Department of Health and Human Services, I
have notified our aging networks about these scams and put our Senior
Medicare Patrol teams on alert. In addition to their existing
responsibilities, our Health Care Fraud Prevention & Enforcement Action
Teams (HEAT) will vigorously monitor and crack down on new forms of
fraud and abuse.
“Now, we are counting on law enforcement officials
in states across the country to crack down on those who seek to defraud
consumers. While there are new insurance options in the near future – a
new high-risk pool program for those blocked out of insurance due to a
pre-existing condition and new insurance protections that begin in
September – consumers should beware policies that are time limited,
offer limited benefits, or advertise themselves as necessitated by
health insurance reform.
“I urge you to vigorously monitor and prosecute any
individuals who attempt to operate or profit from dishonest scams that
take advantage of the new law. And I hope you will act quickly to make
investigating and prosecuting these cases one of your top priorities.
The Department of Health and Human Services stands
ready to serve as a resource for you and I look forward to working with
you as we fight fraud, implement health reform legislation and
strengthen our health care system.”
Links to both letters are below
>>
Attorneys General Fraud Letter (PDF)
>>
Insurance Commissioners Fraud Letter (PDF)
