Shortly after the Patient Protection and the Affordable Care Act (ACA, or more commonly, "Obamacare") was signed into law in 2010, scams linked to the programs began to crop up. At Fraud.org, we are concerned that it's going to only get worse as state and federal health insurance exchanges come on line this fall.
In Massachusetts, scammers deceptively marketed fake health insurances policies and created fake Web sites that claimed to sell Obamacare, targeting seniors to gain their personal information. In other cases in Kansas and Alabama, con artists posing as government employees conned consumers into divulging their bank account numbers in order to sign up for fake health care plans. Fraudulent health insurance plans are being offered by these criminals for as little as $29.95 per month. An advertising company in Nevada reported to have received faxes from no-name companies that claimed to provide insurance at $29.99.
Obamacare scams come in a variety of forms. Consumers have complained about con artists contacting them by phone, fax, email and even in person. A common version of the scam involve fraudsters claiming to be from the federal government and directing consumers to purchase insurance cards in order to be eligible for coverage under the ACA. Scammers intimidate consumers to give them their bank account routing numbers or make a direct cash transfer by using words like “it is the law” or “the government now requires it.”
Consumer confusion about Obamacare is one of the driving factors of these scams. Polls show that although Americans know that they will be required to have health insurance or pay federal fines, only a few clearly understand how Obamacare will affect them. For example, according to a Houston Chronicle report, scammers have threatened consumers with jail time if they don’t purchase the fake insurance cards. In fact, the individual mandate provision of Obamacare -- which levies a financial penalty on families and individuals that don’t obtain insurance -- does not take effect until 2014, and it contains no jail penalty.
Another variation of the scam begins with fraudsters claiming to be “navigators.” Under the ACA, thousands of workers, called “navigators” are being trained to help consumers apply for the insurance coverage through state and federal exchanges. Scammers claiming to be navigators or Medicare officials, trick seniors and low-income consumers into divulging personal information and paying for fictitious insurance plans. The Better Business Bureau reported that a company in Arizona deceived a senior into providing her bank account number by claiming that she was qualified to sign up for Obamacare, and that there were only twenty spots left. Fraudsters have also frequently directed consumers to wire money or send funds via a prepaid card if they want the full benefits of Obamacare. In the month of May alone, the Federal Trade Commission received over 1,100 complaints about similar scams.
Consumers can better protect themselves from Obamacare scams by following some suggested preventive measures:
- Get informed about how the health reform affects you. The Center for Medicare and Medicaid Service’s HealthCare.gov Web site is a great place to start.
- If someone claiming to be with Obamacare or another federal program asks you to wire money, give out your bank account number or load funds onto a prepaid card, it’s a scam.
- If you received an unsolicited phone call, email or fax claiming that you need to purchase a new Medicare card or update your personal information (such as your Social Security number, date of birth or other sensitive information) because “it’s the law,” simply hang up and report the event to Fraud.org or the FTC.
- Be careful of phishing sites made to look like official insurance exchange Web sites. They may contain the actual seal of the real insurance exchanges, but likely simply exist to load malware onto your computer or collect your personal information.
- In the event that you inadvertently divulge personal information to an Obamacare fraudster, inform your banks, credit card providers and the three major credit bureaus so that they can be on the lookout for potential identity thieves.