Avoiding Health Insurance Scams: Your Guide to Making Smart Coverage Choices

If you’ve just started researching health insurance coverage options, you’ll know that the industry can be complex. There are countless coverage options available at multiple price points. 

Unfortunately, the confusion surrounding health insurance can sometimes lead to exploitation. We’ve seen operators selling inadequate health insurance products to customers throughout North Carolina that don’t deliver the benefits clients are promised.

The Rise of Health Insurance Scams

Health insurance scams are unfortunately becoming increasingly more common, especially when healthcare is in the spotlight, such as during the COVID-19 pandemic. During the height of the pandemic, there was an increase in phishing emails and robocalls offering ‘corona insurance’, promoting full coverage for the treatment of COVID-19. 

Dodgy insurance operators also take advantage of specific healthcare events, such as Open Enrollment Periods for Medicare plans or Affordable Care Act (ACA) plans. Scammers often impersonate Health Insurance Marketplace representatives, saying they need personal information to verify coverage or offer plan assistance for a fee.

How the Fraudsters Work

Typically, fraudulent insurance salespeople will offer you a simple solution to getting comprehensive coverage, usually at a discounted rate, that’s very appealing. They do this using a few different tactics, such as:

• Cold calls

• Generating leads via websites

• Paid online advertising - so their website is first when you search online

In addition to offering low premiums, copayments, and deductibles, some scammers will feature the names or logos of reputable insurance companies or organizations to convince people to sign up - without the consent or knowledge of the organization.

The Result of Falling Victim to a Scam

The health insurance policies sold by fraudulent operators typically provide far less coverage than promised and sometimes no coverage. For many victims who purchase these discounted plans, they’re buying a medical discount plan or a limited-benefit plan.

The monthly fees you pay provide reduced prices on specific products and services at participating providers, but they’re not a suitable alternative to proper health insurance. And you’ll often be left with significant medical bills because your plan doesn’t provide full coverage.

What to Look out For

Based on our experience, here are a few things to look out for:

• High-pressure sales pitches: If someone is pressuring you into purchasing a low-cost plan or is offering you special rates to sign up immediately, it’s usually a sign that something isn’t right.

• ERISA licensure: If someone claims their plan is licensed under ERISA (Employee Retirement Income Security Act), it’s usually a sign the plan isn’t legitimate. Insurance companies are licensed by states, not federal bodies.

• Requirements to join an association or union: If a plan requires you to become a member of an association or union (typically fake), it can indicate fraudulent group health insurance.

• Someone claiming to be a Government representative: No legitimate government representative will ever try to sell you health insurance.

• Using online channels to collect personal information: Legitimate agents won’t use social media or online forms to collect your data.

• Misleading ads: Any advertising promising monetary or other incentives to enroll.

How You Can Protect Yourself Against Fraudsters

Knowing how to protect yourself against fraudulent operators can ensure you get the right coverage for you and your family. Here are a few things you can do to help stay safe when choosing health insurance plans.

• Compare rates: If the premiums seem too good to be true, they usually are.

• Verify the license: Get in touch with your state insurance commissioner to ensure the plan provider you’re purchasing with holds an appropriate license.

• Insist on documentation: Ask for a statement of benefits or a complete policy document before signing anything.

• Make sure you differentiate between discount plans and health insurance: Learn the critical differences between the two, and ask specific questions to ensure you know what you’re signing up for.

• Research associations or unions: If someone asks you to become a member of an association or union, verify that the organization exists by checking they have a U.S. address and phone number and can show they perform activities beyond selling health insurance. 

• Confirm affiliations: If someone is claiming to be selling plans through a major insurer, make sure you verify they’re a legitimate partner.

How to Identify a Legitimate Agent

Here are a few things you can look out for that can help you determine whether or not a health insurance agent has your best interests at heart.

• Fully explain your coverage options and why a plan is recommended as the best fit for you.

• Provide accurate and complete information that is relevant to your income and eligibility requirements.

• Are transparent with the information they share with you throughout the sales and enrollment process.

• Follow a code of conduct that’s easily accessible to customers, outlining the key principles and expectations of how agents should behave when dealing with customers and potential customers. 

• Respect customers by following strict protocols to keep personal information safe and secure.

• Show proof or evidence of complying with regulations relating to the health insurance industry. 

• Have guiding principles and values related to integrity, accountability and high-quality service.

• Proven service through consistent, high-quality reviews available on a range of platforms.

What to Avoid When Purchasing Health Insurance

Here are some additional measures you can take to help avoid scams when purchasing health insurance.

• Avoid sharing personal information on websites when sourcing quotes to help prevent sales calls.

• Don’t engage with sales agents who aren’t providing clear responses or offering vague answers to your coverage questions.

• Avoid policies with lax acceptance criteria - legitimate insurance companies will require a thorough evaluation before offering coverage. 

• Don’t provide your bank or credit card details to anyone about any ACA coverage assistance. 

Getting Help to Secure the Best Health Insurance Coverage

Safeguarding yourself against health insurance scams means you need to be aware, stay vigilant, and do your research. 

Getting help, guidance, and advice from an experienced and locally based health insurance agent can help you get the right coverage at the right place. 

If you need help finding the right insurance for your circumstances, contact one of our experienced agents today. Our team specializes in helping North Carolina residents make informed decisions about their health coverage. 

Get in touch with us today to access genuine and comprehensive health insurance protection.