Scam alert: Make sure you don’t fall for a fake insurance plan

|
health care 2
Image Credit: FTC
Team Clark is adamant that we will never write content influenced by or paid for by an advertiser. To support our work, we do make money from some links to companies and deals on our site. Learn more about our guarantee here.
Advertisement

A shady health insurance operation that allegedly raked in more than $100 million by selling bogus insurance plans has now been shut down cold by the Federal Trade Commission.

RELATED: The real reason why many of those 2019 health plans are so cheap

Beware of phony health insurance during open enrollment

Open enrollment period for health care coverage under the Affordable Care Act (ACA) began November 1 and runs through December 15. That’s created an opportunity for the scamsters to come out of the woodwork!

The FTC has put the kibosh on a network of questionable companies that were selling short-term health insurance plans — like those championed by the Trump Administration as an alternative to Obamacare — as though they were major medical coverage with a full-spectrum of benefits.

Unfortunately, the benefits that customers were promised turned out to be vaporware!

Simple Health Plans, a Florida-based company, and its affiliated websites are accused of pushing plans that masqueraded as comprehensive health care with coverage for pre-existing conditions, prescription drugs and more. Consumers were allegedly told the plans were compliant with Medicare and the Affordable Care Act.

Here’s how the pricing and supposed perks on a typical plan worked:

  • One-time enrollment fee, which ranged from approximately $60 to $175
  • Ongoing monthly premium payment of anywhere from $40 to $500
  • The promise of no copays to be responsible for
  • No deductibles to meet

But what consumers really got was a plan that did not cover preexisting medical conditions, prescriptions or any of what they claimed to cover.

In fact, the FTC says that these plans was really more akin to “a medical discount program or extremely limited benefit program that did not deliver the promised benefits and effectively left consumers uninsured.”

That doesn’t even cover the thousands of dollars in unpaid medical debt these scam plans allegedly stuck unsuspecting customers with!

Other pitfalls of the plans included a three-visit cap on doctor’s visits annually — with only $50 being paid toward the bill each time — and a maximum benefit for hospitalization that was capped at $100 per day.

Unfortunately, the online marketing of the plans often featured logos of AARP and unaffiliated health insurers such as Aetna, Blue Cross Blue Shield, Cigna and United Healthcare, among others, to add an air of legitimacy and lure people in.

health care scam 4
FTC

The FTC has now frozen the assets of Simple Health Plans and affiliated websites like obamacare-plans.com, official-plans.com, trumpcarequotes.com, healthinsurancedeadline2018.com, simplecare.com and usamedsupp.org that served as lead-generators.

In addition, operations at the alleged offenders have been shut down pending resolution of the case.

Here are some key takeaways so you can avoid being scammed

Nobody wants to pay for health coverage only to find out it doesn’t work when you need it!

Here are two proactive steps you can take to avoid falling victim to this kind of scam:

Always get it in writing

Ask for written information that details exactly what a plan supposedly covers. If the person on the other end of the line refuses to provide it or says they’re not allowed to, that’s a huge red flag.

Ask your “insurance agent” for his or her license number

Many of the people who were working the phones on behalf of Simple Health Plan to sign up unsuspecting customers claimed they were insurance agents.

However, any legitimate insurance agent will be properly licensed to do business in your state. If you have any doubt, ask them for their full name and/or license number. Then go online to your state insurance commissioner’s website and do an agent search.

Here’s an example of what the search tool looks like in the state of Georgia:

insurance agent search tool georgia

Check out these other Medicare stories on Clark.com:

Advertisement
Theo Thimou About the author:
Theo has co-written several books with Clark Howard, including the New York Times #1 bestseller Living Large in Lean Times. As a single widowed parent of two young children, he strives to bring unique savings tips to men and women like him who must face life without their spouses. He can be reached at [email protected]
View More Articles
  • Show Comments Hide Comments