They’re back . . . health care hucksters who attempt to part your clients from their health-insurance premiums. If the U.S. economy falls into a recession, you’ll probably be seeing more, so warn your clients now.

In the last wave of health care flimflams, at least four unlicensed insurers sold medical insurance to thousands, leaving insureds with $85 million in unpaid medical bills. According to one health care expert, more than 200,000 companies and individuals have fallen prey to such scams since 2000, including those who bought insurance from the mother of all scammers, Employers Mutual. In that case, consumers were saddled with $30 million in unpaid claims.

Although state regulators cracked down on the health care fraudsters that emerged around the millennium, phony offers appear to be rising, insurance regulators say. For example, an unidentified company in Kentucky has been trying to sell fake insurance for monthly premiums ranging from $199 for one-person coverage to $359 for families. In Arizona, the Insurance Department ordered the National Trade Business Alliance of America to stop soliciting Arizona residents to buy coverage for as little as $124 a month. Regulators in North Carolina and Pennsylvania have also targeted phony carriers for similar activities.

To help your clients avoid health-care scams, pass along these red flags today:

  • An unbelievably low premium.
  • Promises of no underwriting.
  • Warning that the offer is for a limited time only.
  • Sales literature that is missing key information, such as an address or phone number.
  • Refusal to provide a list of providers until after the sale.