3 Ways Your Health Insurance Company Is Scamming You

The growing number of consumers taking up health insurance plans has led to the mushrooming of scam health insurance providers. These providers often target new retirees and the elderly individuals and small-business owners, who can’t negotiate better rates with legitimate insurers. Be very cautious before you invest in any health policy. Read on to get an idea about 3 ways in which your health insurance company can scam you.

1.Failure to pay claims

Usually fraud health insurance agents sign up a huge number of people quickly by offering them lucrative deals. These insurance providers keep paying small premium amounts and medical claims, but if there is a substantial claim amount or regulators catch them, these illegal companies vanish as if they never existed.

So, just beware if you are getting delayed payments or your service provider is offering fake excuses for the failure to make the payments. If you have signed up for these illegal plans, you may be liable for the medical bills of your employees as well.

2.Non-licensed health plans

If the company from which you have bought your health care policy is not licensed by State Insurance Commissioner, you can be in trouble. If all the protections of insurance regulation do not apply on your service provider, then the company may be phony. In this case your service provider is scamming you by selling non-licensed health plans.

Insurance agents are not allowed to sell any legitimate ERISA or union plan as federal law governs them. So, if your insurance agent tries to dupe you by selling an “ERISA” or “union” plan, report them to your state insurance department.

3.Unusual coverage offered at lower rates

If you are offered an unusual coverage irrespective of your health condition and that too at lower rate and much more benefits in comparison to other insurers, its time for you too hit the panic button. Do not get fooled by the lucrative offer, else you can be taken for a ride. The “scamsters” aim to collect huge amounts as early as possible so, they try to sell maximum number of policies at attractive prices.

About the Author

Priya Nandakumar

Priya Nandakumar is a personal-finance journalist and consumer advocate who has spent the past eight years covering insurance, credit, and household budgeting for regional publications and personal-finance websites. She is not an agent or an adjuster; her role is to represent the reader's side of the table, asking the questions a first-time policy shopper might not know to ask and pressure-testing marketing claims against what a policy actually delivers.

Priya's reporting has focused heavily on the gap between what insurance advertising promises and what claims data and complaint records actually show, drawing on state insurance department filings and consumer complaint databases to inform her articles. For TheInsuranceMag.com, she writes primarily about comparison-shopping strategy, red flags to watch for when evaluating a quote, and how life events like marriage, a new home, or a growing family should change someone's coverage.

She holds a degree in journalism and has completed coursework in personal financial planning to better understand the products she covers. Priya is a member of a national association of consumer journalists and has spoken at regional financial literacy workshops about how to read an insurance policy before signing it. She currently lives in the Philadelphia area.