Medical Insurance Scams
Phony insurers take the money and run when the biggest medical fees are due
A warning is going out about an insurance scam so widespread it's leaving hundreds of thousands of unsuspecting
Americans with hundreds of millions of dollars in unpaid bills.
Most of us have never heard of this scam, but it can potentially leave you bankrupt. What is happening has become
one of the largest insurance scams out there: Unlicensed companies posing as real insurers. They take your premiums
and pay one or two small bills, and then disappear when the big claims arrive.
The policies themselves are counterfeit, they look like and sound like an ordinary insurance contract, but alas
they are fake. The names sound real, too: Employers Mutual, TRG Marketing. These companies are two of the largest
fake insurance companies that states are going after. The incidence of phony insurance policies is on the rise yearly.
In fact, the most recent government investigation finds more than 200,000 consumers were left with $252 million
in unpaid claims over just a two year period. State governments have thousands investigations and are working to
shut them down and prosecute those responsible.
How to protect yourself from phony medical insurers
"The best cure is a large dose of prevention," said James Quiggle, Coalition Against Insurance Fraud. People need
be skeptical of any policy that is really inexpensive or offers easy sign-up despite a pre-existing condition. And
watch out for companies that refer to coverage as "stop-loss insurance."
"Consumers will have to be very careful when they're offered a deal that seems too good to be true," said James
Quiggle, Coalition Against Insurance Fraud.
And the number one thing to do that few of us have done: Call your state insurance Commission to confirm the policy is legitimate.
Officials warn these fake insurance companies generally will start off by actually paying a small claim here and there
to throw members off. Then, they continue to pocket premiums until they get nabbed for not paying larger claims.
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