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Health Secretary Warns of Insurance Scams

Source: NY Times


Posted on 07 Apr 2010

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The secretary of health and human services, Kathleen Sebelius, wrote to state officials on Tuesday to urge that they take action against "scam artists" reportedly marketing fake insurance policies to exploit the new law overhauling the health care system.

"Unfortunately, scam artists and criminals may be using the passage of these historic reforms as an opportunity to confuse and defraud the public," Ms. Sebelius said in a letter to state insurance commissioners and attorneys general.

In the letter and in a speech at the National Press Club, she described reports of people setting up toll-free telephone numbers and going door-to-door peddling phony policies, in some cases falsely claiming that the new law established a limited enrollment period for buying government-subsidized insurance.

Ms. Sebelius compared the alleged scams to reports during the H1N1 flu epidemic of sales of counterfeit flu treatments, and called on the state officials to investigate and prosecute any reported cases of insurance rip-offs.

She also said her department was alerting seniors groups to beware of fraudulent sales pitches. The insurance exchanges to be established under the law do not take effect until 2014, although states can get federal aid in the meantime to set up insurance pools for high-risk individuals to buy policies more cheaply than they can on their own.

In her speech, Ms. Sebelius described additional steps that her department is taking this week to implement the health insurance overhaul that President Obama signed into law last month. The department is issuing guidelines for private Medicare Advantage plans to include cost-sharing protections for seniors and new options for Medicaid to cover low-income adults.

She also announced a “Medicare dashboard” on the department’s Web site where users can search Medicare data on spending for inpatient hospital care and sort it by state, hospital and condition “to give consumers, purchasers and providers the health information they need to make smarter choices.”


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