How To Recognize Medical Insurance Scams

As we grow older, protecting our health becomes increasingly important. However, it is not uncommon for some disreputable companies to prey on seniors' concerns about medical costs, trying to scam them out of their hard-earned savings. Here's what I've learned about spotting and avoiding medical insurance scams.

Be Wary of Cold Calls and Unsolicited Offers

Out of the blue, I received a call from an insurance company I'd never heard of. The agent claimed she could offer me much better coverage for less money. This immediately raised red flags and made me think of the medicare scams I know.

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Genuine providers don't make unsolicited calls promising deals that seem too good to be true. So hang up if you get a cold call about medical insurance. Don't give out any personal information.

Ask About Licensing and Accreditation

When speaking with any health insurance provider, ask if they are properly licensed in your state. Licensed insurers are regulated and subject to consumer protections that do not apply to fraudulent operators. Accreditation from respected industry organizations can also indicate a company's legitimacy.

For example, one significant association accredits Medicare plans based on quality standards and consumer satisfaction ratings.

Though not a guarantee, look for plans respected organizations accredit as a sign they operate above board. An unwillingness to provide license or accreditation details could signal it's best to refrain from doing business with that company.

Research Companies Thoroughly Before Buying

When considering any new insurance plan, thoroughly research the company. Check reviews online and confirm they are licensed in your state.

Ask contacts if they have experience with the provider. Disreputable firms often use official-sounding names to seem legitimate. But a little digging reveals many complaints and lawsuits.

Avoid doing business with any company that has a questionable track record.

Don't Fall for High-Pressure Sales Tactics

Some agents use pushy, high-pressure tactics to get your money before you have time to look into their company and policies. One broker insisted I buy immediately or miss out on this fantastic deal on medical back braces.

He became angry when I said I needed time to review the plan and hung up on me. Real professionals don't try to scare or bully you into making snap decisions about insurance.

Verify Networks and Providers

When considering a new medical insurance policy, I always confirm which doctors, specialists, pharmacies, and hospitals are in the plan's network.

Some scammers claim you can see any provider, then leave you with substantial out-of-network bills. Call your own doctors to verify they accept the plan.

Check provider directories. Don't just take a salesperson's word for it.

Read the Fine Print

Scam health plans often have significant coverage gaps hidden in the fine print. They lure you in with low monthly premiums and leave you responsible for most medical bills.

One plan I reviewed offered premiums 50% lower than competitors. However, upon closer inspection, it provided very little actual coverage and had exclusions for preexisting conditions, preventive care, and other common health needs.

Carefully read the plan's coverage details, exclusions, and limitations before deciding. Make sure any verbal promises match the written policy.

Avoid Medical Discount Plans

Some scammers promote “medical discount plans,” promising access to reduced doctor visits, prescriptions, and procedure costs. However, these are not insurance and provide very limited – if any – real discounts.

I received a sales call selling a medical discount plan for $10/month. They claimed the plan provided 40-70% off all healthcare expenses at thousands of providers nationwide. But when I checked the list of “participating” providers in my area, few offered discounts.

Discount plans can seem appealing but rarely deliver worthwhile savings. Don't be misled into thinking they provide actual insurance coverage.

Confirm Transportation Benefits for Seniors with Medicare

One valuable benefit offered by some Medicare Advantage plans is free transportation for seniors with Medicare in case of a medical emergency or, in some cases, for medical appointments. However, scammers sometimes falsely advertise this service to attract seniors.

As I helped my parents evaluate Medicare plans, transportation was an important consideration for them. We had to carefully confirm which plans included this benefit before enrolling. Some plans advertised free rides that were not actually covered once they joined.

If transportation is a priority, speak to a Medicare counselor to understand your options and verify details with any plan before making a decision.

Key Takeaways

Listening to your gut is one of the best defenses against health insurance scams. Trust those instincts if a sales pitch sounds too good to be true or you feel pressured to make a rushed decision.

Sorting through health insurance options is challenging enough without the added threat of scams. But there are now more resources than ever to help you make smart choices that protect your health and wallet. Researching available plans, reading the fine print, and verifying details can provide peace of mind.

How To Report Medical Insurance Scams

Let your family and online friends know about these medical insurance scams. Feel free to share this article if it was helpful. Meanwhile, you can report medicare scammers and any other suspicious activity to the Federal Trade Commission (FTC) using the page below:

Report To The FTC Here

How To Protect Yourself More

If you want to be amongst the first to receive alerts about the most notorious scams every week, subscribe to our Scam Detector newsletter. You will receive periodic notifications from us with insightful tips. That will include how to prevent fraud and information about the newest tools you can use to fight crime.

Meanwhile, feel free to educate yourself with some other insurance fraud-related articles. They are listed under this paragraph, so that you know more about online security. Last but not least, if you have any bad experiences, make sure to use the comments section below to expose other scammers.

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