Watch Out For Medicare Scams

The March issue of Kiplinger’s features an article that will help you spot a medicare health scam before you (or your family) get taken for a ride. Watch out for sneaky insurance agents who ask for personal information or say they are from medicare and can reduce your premium:

When medicare introduced Part D coverage to pay for prescription drugs in 2006, it gave seniors a golden opportunity to save money — and crooks a golden opportunity to steal it.

The law offers Medicare beneficiaries a bewildering array of new health-insurance options. They can now choose from dozens of Part D prescription-drug plans to supplement Medicare, or they can opt out of traditional Medicare and enroll in a Medicare Advantage plan to get both medical and drug coverage from a private insurer. All of the new choices have resulted in “an immense amount of confusion,” says Micah Roderick, of the Illinois attorney general’s office.

Kiplinger’s says that corrupt agents have been known to sign people up without their knowledge or without properly explaining the limitations of the plans, and have even been caught posing as employees of medicare to sneak into buildings where seniors live. Some agents are not above stealing IDs, too. Huge commissions are paid to agents because the subsidies given to these programs are so lucrative for the private insurance companies. Naturally, this leads to all kinds of fraudulent behavior.

Barbara Jean Davis, 72, and her husband, Esty, 75, who live in Wilmington, N.C., had been covered by Medicare and retiree health benefits through Barbara’s former employer, DuPont. Their premiums and co-payments were reasonable, and without the coverage, Esty, who suffers from a number of ailments, would have had to pay hundreds of dollars a month for his medications.

About a year ago, Barbara was contacted by an insurance agent offering a Humana Medicare Advantage policy, subsidized by the government, with a zero-dollar premium. Suspicious but curious, Barbara invited the agent to her home. In the middle of his pitch, Barbara and Esty received a phone call and found out that one of their best friends had suffered a heart attack.

Distracted, Barbara tried to get rid of the salesman. But he persuaded her and Esty to sign papers that would give them a “head start” should they decide to buy the Humana policy later. “He made it sound like we hadn’t signed up for anything yet,” says Barbara.

But the next time she ordered Esty’s prescription, the pharmacist told her the DuPont insurance was no longer in effect. The agent “had canceled my insurance and signed me up with Humana without my say-so,” says Barbara.

It’s apparently quite easy to sign someone up for these plans without their consent. One expert interviewed in the piece had this to say: “If I had certain information about you, I could sign you up for Medicare Advantage and be paid a commission, and you wouldn’t know it until you filed a claim.”

If you think you’ve been the victim of a medicare scam or have information about one, you should report it to your State Health Insurance Assistance Program, says Kiplinger’s.

How to Spot a Health Scam