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GAO Warns Against Bogus Health Insurance

The General Accounting Office told the Senate Finance Committee last week that more than 15,000 employers bought 144 separate bogus health insurance plans that left...
March 9, 2004

The General Accounting Office told the Senate Finance Committee last week that more than 15,000 employers bought 144 separate bogus health insurance plans that left an estimated 200,000 policyholders with at least $252 million in unpaid claims between 2000 and 2002. The GAO study found that the bogus insurance problem is growing, with nearly twice as many fake plans identified in 2002 as in 2000. Every state was affected, although the problem was more widespread in southern states. Kathryn Allen of the GAO told the committee that with premiums for legitimate insurance rising at double-digit rates, "lower-priced policies that appear to provide comprehensive coverage can be very attractive."

Questionable Plans Promise Coverage, Claims Unpaid (San Diego Times-Union 3/8/04)

Full GAO Report (3/4/04)

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