Low-cost health insurance plans may appeal to frugal consumers. They may also be indicative of fraud, according to a recent report by USA Today.
A growing number of companies are taking advantage of tough economic conditions which make consumers eager to reduce expenses. Recent healthcare reform has also fueled fraudsters, according to the report, as many consumers are unsure about some of the changes under the Patient Protection and Affordable Care Act.
"There's high unemployment, health premiums are expensive and tens of millions of people have no health coverage," James Quiggle, spokesman for the Coalition Against Insurance Fraud, told the newspaper. "This is an ideal breeding ground for scams."
Regulators have taken action against the American Trade Association, Consolidated Workers Association and Healthcare One for allegedly offering bogus insurance. Many consumers targeted by such plans may not realize their insurance is fraudulent until they try to use it.
A recent announcement by the New York State Department of Insurance warned residents that door-to-door and high pressure sales tactics are often indicative of fraud.