Phony health insurance plans on the rise in US

WASHINGTON: Phony health insurers are pocketing millions of dollars in premiums while leaving their victims with huge, unpaid medical bills, according to a report released last Thursday.  

Such scams are on the increase because of rises in legitimate premiums, according to The Commonwealth Fund, a New York-based independent foundation studying health policy that published the report.  

“The United States is experiencing an unprecedented influx of unauthorised insurers selling phony health insurance,” the researchers wrote.  

“Unauthorised health insurance companies intentionally fail to comply with state and federal law regarding insurance regulation; they collect premiums for non-existent health insurance; they do not pay claims and, ultimately, they leave patients with millions of dollars in medical bills,” they added.  

Since 2001, four unauthorised plans left nearly 100,000 people with US$85mil in medical bills. “Most victims have been small businesses and self-employed people,” reads the report, which is on the Internet at

“Being victimised by a phony health insurance scam is worse than being uninsured,” Mila Kofman of the Health Policy Institute at Georgetown University, who led the study, said in a statement. “Here, not only are you stuck with huge medical bills, you’ve also been defrauded thousands of dollars in premiums.” 

Kofman and colleagues interviewed state insurance commissioners, insurance regulators, the Employee Benefits Security Administration – part of the US Department of Labour – and other agencies for the report.  

They said Florida was especially hard hit, with 30,000 victims of such scams. The scams exist, they said, because health insurance is expensive and difficult for many people to get. – Reuters 

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