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Study: Phony Health Plans Have Bilked 100,000 Since 2001

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NU Online News Service, Aug. 28, 2003, 5:38 p.m. EDT – Phony health plans have bilked 100,000 U.S. consumers since 2001 and left the victims with $85 million in unpaid medical bills, or about $8,500 in bills per victim, according to authors of a report released by The Commonwealth Fund, New York.

The authors, who are affiliated with the Health Policy Institute at Georgetown University, report that some of the organizers of the phony plans are pretending to be exempt from state regulation.

Some organizers are marketing their plans as phony union plans, employee leasing firms, association health plans or discount health plans, the authors write.

The authors note that licensed insurance agents who are tricked into selling phony plans may end up having to pay the victims’ medical bills out of their own pockets.

State regulators and groups such as the National Association of Insurance Commissioners, Kansas City, Mo., and the National Association of Health Underwriters, Arlington, Va., are already trying to educate agents and members of the public about the problem. But regulators and groups should do more to promote awareness, the authors write.

Parties interested in fighting the problem also should try to reduce consumers’ desperation by improving access to legitimate health coverage, the authors write.


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