A spreading epidemic of bogus health plans is hitting small businesses as well as consumers, a spokesman for the Coalition Against Insurance Fraud said.
"Though the examples that have surfaced tend to involve consumers, small businesses have been targeted and even referenced in state announcements of crackdowns," explained James Quiggle, the coalition's director of communications. "Small businesses and self-employeds are struggling to find affordable premiums for themselves and their employees and thus are logical targets for sales pitches."
Bogus plans are spreading rapidly around the nation, defrauding vulnerable consumers seeking affordable health coverage in a downturned economy, according to the coalition, which lately has been calling attention to health scams as the biggest insurance fraud problem.
Fraudulent health plans, one of the harmful byproducts of the recession, "are the largest and fastest-spreading insurance scam," according to the coalition. "Most states have been forced to issue emergency cease-and-desist orders, lawsuits or other actions over the last two years."
Some consumers have faced thousands of dollars in medical bills when their purported health plans wouldn't pay up. Well over 12,000 victims have been defrauded nationally, the coalition estimated, with damage ranging from stolen premiums to large, unpaid medical bills.
The organization explained that bogus plans typically promise full health benefits but fraudulently deliver lesser products such as:
–Fake coverage.
–Limited-benefit policies that can be nearly useless.
