If you don’t have insurance and have to buy it yourself, however, you’re at risk. If you’re not careful, you can be taken in by con artists who want to separate you from your money rather than keep you in good health.

Here are some signs that a medical insurance might be a scam:

1. The sales pitch is invasive. If you’re repeatedly called by a telemarketer or spammed in your email, you probably aren’t dealing with a legitimate medical insurance provider.
2. The salesperson is pushy. Now, this isn’t always a hard and fast rule. There are pushy insurance salespeople (surprise!) selling legitimate products. But, in some cases, a rep may be deceptive or misleading. Always verify before you buy, and don’t be pressured to sign.
3. They make outrageous claims regarding health care reform. Some scam artists will claim that their product is part of the “health care reform bill” or some other such nonsense. Don’t buy it. Most of the changes that the bill makes don’t even take place for a few more years.
4. The deal seems too good to be true. If it seems too good to be true, it probably is. If the premiums are amazingly low and signing up is easy, you might be looking at a scam. Real insurance is complex and expensive.
5. The salesperson is evasive. If you ask direct questions and the salesperson replies with an answer like “it’s all in the policy,” look out. It doesn’t mean it’s a scam, but it may mean the salesperson doesn’t know the product very well, and that’s a bad thing.
6. You have to join a group to get the policy. Unless you’re talking about the local Chamber of Commerce or Small Business Association, you shouldn’t have to join a union or an association to get your insurance.
7. They ask for credit card or bank account information. You should be able to get medical insurance and pay however you want. If they can only process a credit card or electronic debit, as opposed to accepting a check that you mail, they may be fraudulent.

Photo via Randy Son Of Robert

Discount plans

How exactly does this happen? Well, there are a number of companies offering legal, legitimate plans that let you have a discount on your medical benefits. What these plans do is, in essence, let you buy into a group purchasing scheme that gives you a little bit better pricing on medical services.

Unfortunately, these plans are often very limited. They’re limited in what they’ll cover, and they’re limited in where you can use them. They are similar to some of the prescription drug group plans that you’ve probably read about in recent years, only they are often not as widely accepted.

Certainly, they’re not as widely accepted as traditional medical insurance. In many cases, even hospitals aren’t a part of these plans. This leaves unsuspecting consumers in the lurch, sometimes owing thousands of dollars unexpectedly.

Limited Benefit Plans

It isn’t only discount plans that can throw customers off. Limited benefit plans are ones that give you basic coverage for routine or minor care. These types of plans only cover minor medical issues, and won’t cover catastrophic medical conditions or accidents.

In fact, in the state of New York, advertisements for one company offering this type of plan were ordered off the air nationwide. The company offering the limited benefit plan, American Medical Life Insurance, was also fined $700,000.

The real problem is that this plan was marketed as something it’s not. For example, it covers $1,000 each day for a hospital stay. Stays typically run around $5,000 a day.

Consumers find that the coverage is woefully inadequate, and they often don’t realize it until it’s already too late.

Caveat Emptor

While consumer advocates are asking for changes in how these kinds of plans can be marketed, in the meantime it’s a case of “buyer beware.” If you’re considering purchasing medical insurance, make sure you know what it is, and what exactly it covers, and who accepts it.

Photo via stevendepolo

There are a number of ways that someone can commit medical insurance fraud. One of the most common ways that medical insurance fraud occurs is when someone that has legitimate access to a patient’s records, such as a hospital staffer or a physician’s assistant, leaks private information to a buyer, often who is a member of a criminal syndicate.

How does this work, exactly? Well, the Medicare system alone is worth around $450 billion each year, with 44 million beneficiaries. This makes the U.S. Federal Government one of the biggest targets, and one of the biggest victims, of medical insurance fraud.

Once the fraudulent syndicate gets a hold of medical insurance information and identifying information like a Social Security number, they then bill Medicare or another medical insurance provider under false pretenses. They charge, and are paid for, procedures, medications or treatments that have never actually been prescribed.

Someone, for example, might order a wheelchair for a person that doesn’t need it. They’ll bill Medicare, take the money and provide no wheelchair. Home health care in an area that especially falls victim to this kind of fraud, as these criminals will bill the insurance company for home health care visits that never occur.

Another type of fraud involves tampering with sensitive and personal medical history and information. For example, your records might be changed to reflect an allergy to penicillin, followed by a purchase of an Epi Pen. The Epi Pen is never purchased, of course, and the criminals pocket the money.

You might need treatment, however, and not be able to receive penicillin because of this fraudulent entry in your health records.

The same goes for things like eye glasses. An insurance company will usually pay for glasses once every two years, meaning that you could need new glasses and have to go without because fraudsters cheated your insurance company.

Whatever medical insurance solutions Washington comes up with, the issue of medical fraud isn’t likely to be solved any time soon.

Photo via Domingouceda