Emerging Discount Medical Insurance Scams

The Federal Bureau of Investigation (FBI) warns the public of discount medical insurance scams. Discount medical insurance scams involve misleading or fraudulent offers for medical insurance plans that promise reduced rates on legitimate medical insurance but do not provide any actual medical insurance coverage, resulting in millions of dollars in losses annually. These scams often target people who are looking for more affordable healthcare options and use misleading tactics such as stating to be a legitimate medical insurance provider, pressuring people to sign up quickly due to time limited special rates, or promising free services with hidden fees to lure people to sign up. A typical discount medical insurance scam begins with unsolicited contact via calls, texts, or emails from unknown businesses offering special deals or discounted medical insurance.

• Washington state issued a cease-and-desist order against a discount medical insurance company after receiving over 100 complaints of fraudulent practices. The company misrepresented their plan coverage options and did not cover medical costs, which left beneficiaries paying out of pocket in full for medical costs they had been led to believe would be at least partially covered. Victims also did not receive refunds after cancelling their insurance plans as the discount medical insurance company had promised, and the company made unauthorized charges to victims' bank accounts. The company was conducting business under multiple names and was responsible for the following examples.¹

  • A couple from Pennsylvania was pressured to sign up for a discount medical insurance plan through what they believed was a national provider. The couple was told to act quickly, or they would lose the temporarily discounted price for the plan. Following an emergency room visit and an appointment with their primary care physician, the couple received an explanation of benefits stating they were responsible for all medical bills as the medical services received by the couple were not covered by their policy.
  • Another individual from Pennsylvania was contacted by a healthcare representative claiming that their company could offer a much cheaper plan than the one the individual had. The individual was told he would receive a refund for his current plan once he signed up for the new plan but did not receive any information regarding the refund. The representative indicated the individual had to act quickly or lose the deep discount. After purchasing the new healthcare plan, the individual never received the promised refund and was unable to get any information from the new insurance company.
• An individual in Texas responded to an advertisement offering aid for gasoline and groceries to senior citizens. He was told he had to sign up for a dental policy with a specific insurance company to obtain the aid. After he signed up, he tried to cancel the dental insurance policy but was told by customer service to request the cancellation via email. The insurance company did not respond to his emails requesting to cancel his dental insurance policy, and he had to cancel his credit card to stop the charges.
• An individual in Maryland was told he would save thousands of dollars by purchasing a health insurance policy and paying for the entire year up front. He was told the new policy would cover his current medical providers and hospitals, and he would only be responsible for a $20 co-pay per doctor's office visit and $50 per urgent care visit. After needing emergency surgery, the hospital informed him that they did not accept his new health insurance, and he was responsible for the $7000 cost of the surgery.