Nina Kallen did an excellent job hosting the most recent Cavalcade of Risk – be sure to check it out. It includes a good cautionary tale about avoiding scam artists, from Hank Stern of InsureBlog. (And for a little extra clarification about electronic and telephone applications, there’s also some additional commentary from Bob Vineyard (another InsureBlog writer) at the bottom of the article.) Hank’s article is an excellent reminder that scammers love to take advantage of changes in legislation that are highly public but also confusing and not well understood. The ACA is a perfect example – no doubt there will be plenty of scammers coming out of the woodwork over the next several months, “selling” health insurance coverage to people who know that something has changed, but aren’t sure about the details.
A good rule of thumb is to be especially cautious if you’re not the one initiating the contact. This is common advice given by financial institutions, and it makes sense for health insurance too. Of course, not all cold-callers selling health insurance are scammers. For some agents, this is simply how they find clients and they may well be perfectly reputable. But before you give any personal or financial information to someone who contacted you first (as opposed to you seeking out their help initially), do your homework. Search for information about the agent or agency online. Check with the BBB. Go on your state’s Division of Insurance website and look up the agent – you should be able to see his or her license history and whether the DOI has taken any action against the agent in the past.
Beware of things that sound too good to be true. If someone calls you and says they can offer you health insurance for a fraction of what you pay now, no underwriting, and it will be effective tomorrow, there’s probably a scam or a whole lot of fine print involved. It’s true that health insurance will be guaranteed issue as of January 2014, but subsidies to help pay for coverage (for households with income up to 400% of poverty level) will only be available through the exchanges. So if someone calls you and says they can hook you up with subsidized health insurance via some other avenue, they are trying to con you. Health insurance will still be available outside of the exchanges (for people who don’t qualify for subsidies, shopping both in and out of the exchange will provide more coverage choices), but remember the basic premise about being skeptical of things that sound too good to be true. And don’t give your personal or financial information to anyone who initiates contact with you until you’ve checked to make sure they and the company they represent are legitimate and will meet your health insurance needs.