Health and Human Services Secretary Kathleen Sebelius is urging state insurance commissioners to warn the public about the sale of fraudulent health insurance policies in the wake of the passage of national healthcare reform legislation, according to an April 20 Consumer Reports blog post. The National Association of Insurance Commissioners (NAIC) issued its own consumer alert. “State insurance regulators are receiving complaints about scam artists going door to door selling ‘ObamaCare’ insurance policies, or claiming there is a limited open-enrollment period to buy health insurance,” the NAIC warning said. “Some of these scam artists have even set up bogus toll-free numbers to sell policies.”

“Bogus health plans have been circulating during the downturn in the economy, and health care reform just gives them another sales hook to fleece consumers who are anxious for an affordable deal,” said James Quiggle of the Coalition Against Insurance Fraud. “There will be a lot of confusion about what health reform does and doesn’t do,” Quiggle says, “and that’s the vacuum that swindlers will try to exploit.”

What It Means to Agents:  Make sure your clients understand: there is no such thing as an “ObamaCare” health insurance policy. The term “ObamaCare” was used during the healthcare debate as convenient shorthand to describe what the President was proposing to Congress. There is no insurance policy by that name, and the government itself will not be issuing insurance policies under the new law – insurance companies will, just as they do now.

Beware of Phony “ObamaCare” Offers (Chicago Tribune 4/20/10)

April 28, 2010