Scammers Lurk Amid HIX Confusion

As a key deadline nears, "Obamacare" fraudsters, under the guise of helping with enrollment in health insurance exchanges, are trying to dupe unwitting consumers into giving up personal information.

As states and the federal government scramble to meet a fast-approaching deadline to establish health insurance exchanges under the Patient Protection and Affordable Care Act, scammers are hoping to cash in on consumer confusion about the plans, the National Association of Insurance Commissioners warns.

"There are folks taking advantage because they know people are hearing blurbs on TV and radio," says Kansas Insurance Commissioner Sandy Praeger, chair of the NAIC's Health Insurance and Managed Care Committee.

"Consumers are not paying a whole lot of attention to it, but just enough where somebody comes along and says 'you've heard about this new health insurance. I am here to make sure you get signed up.' Obviously there is no phone solicitation that is going to occur."

Open enrollment in the new marketplaces begins Oct. 1, but bogus websites that claim to be part of the exchanges have been sprouting online for more than a year. Oftentimes the scammers are looking to sell phony policies or obtain personal information from unwitting consumers, such as Social Security/Medicare ID, credit card, or bank account numbers.

>Bogus Health Plan Offers

Praeger says anecdotal reports have been surfacing about the scams, but it's hard to know how widespread they've become. "We know there are some phony websites that have been created so it's hard to tell because sign-up hasn't really started yet," she says. "But that is why an ounce of prevention is worth a pound of cure—the old medical adage. It is important that we at least get information out there and alert people."

NAIC has red-flagged a handful of the most common scams. One ploy involves unsolicited calls from vendors claiming to have the consumer's new "Obamacare" insurance card. But first personal and financial information must be verified before the card can be mailed. This is a variation of another scam that targets senior citizens on Medicare with claims that bank account and Social Security numbers are needed for them to continue receiving benefits.

There is no requirement to get a new insurance card or a new Medicare card under the PPACA, and NAIC notes that anyone claiming to represent the federal government already would have access to personal and financial data and would not ask the consumer to disclose it.

Act Now or Go to Jail

Another scam identified by the NAIC include: Salespersons claiming that the premium offer is only good for a limited time. In fact, enrollment in the exchanges will be open from Oct. 1 to March 31, and rates for plans in the exchanges will have been approved for the entire enrollment period.

And scammers are known to employ scare tactics such as warning that consumers will got to jail for not having health insurance.

So far, Praeger says, no scams have surfaced that would require new laws. "Our existing consumer protection laws are adequate," she says. "There might be some creative scam out there we haven't thought about, but in most cases a scam is a scam and anybody trying to misrepresent the sales process or encourage someone to buy something that is not appropriate, our laws are sufficient."

Praeger says providers can help by steering patients to federal and state insurance department websites. "We set up our own separate website just for information about the Affordable Care Act called InsureKS.org," she says. "Hospitals, I am sure, are going to have their staff trained to be enrollment counselors. Most physician offices don't do the wallet biopsy before they treat somebody. They treat and if the person can't pay, hopefully physician offices will at least encourage people to look into the Affordable Care Act provisions."