Identity Theft Articles

Health insurance scams could lead to both ruined credit and identity theft

Scammers selling fake health insurance pose financial and medical risk to victims

While Congress continues to implement the new health care laws, many Americans still have questions about when they will be required to purchase medical insurance. Some criminals are using Americans' confusion to develop new health care scams that may jeopardize a victim's credit report and/or put them at risk for identity theft, according to Fox Business.

Two new scams have caught law enforcement's attention. The first involves selling fake medical discount cards to consumers. The cards masquerade as proof of full medical insurance in addition to purported discounts on prescription drugs, medical procedures and tests, doctor's office visits and even hospitalizations, Fox Business reports.

The second scam involves selling fake partial or comprehensive medical insurance to unsuspecting consumers. Criminals sell the insurance and then pay little to nothing on individual claims, reports Fox Business.

Fake medical plans can damage a consumer both financially and medically. When consumers falsely believe they are covered by health insurance, they may receive costly treatments or surgeries and then face the financial consequences of being unable to pay for them, Fox Business said. Despite medical fraud, many doctors will report unpaid medical bills to collections agencies, thereby destroying the patient's credit.

Additionally, carrying a fake policy may exclude consumers from legitimate health coverage. Health care providers can use a gap in coverage to deny insurance to some individuals, namely those that have pre-existing conditions, according to Fox Business. Even in cases where the consumer believed they were covered, medical providers will still view the fraudulent insurance as a gap in coverage and may deny the consumer from purchasing a policy.

Another scenario involves medical identity theft. Most scammers will require the victim to fill out "medical forms," which may ask for personal information such as health records, Social Security number and other sensitive data. The criminal can then use their consumer's information to receive health services under their name.

Americans must become more diligent about safeguarding their personal information, especially when it relates to their medical records which house both health and financial data. Individuals should refrain from divulging any information to door-to-door salesmen selling medical insurance or claiming there is a limited enrollment period. Additionally, many scammers may carry official-looking documents and claim to be from an organization or business. Consumers should do their research and ensure the company is reputable before speaking with a representative.