Morrison Issues Cease and Desist Order on Multi-State Fake Health Plan
Physicians Hospital Organization Blows The Whistle On Fake Health Plans
(HELENA) - State Auditor John Morrison joined today by Greg Drapes, CEO of Monida Healthcare and Alice Gardner, Director of Patient Business Services at Saint Patrick Healthcare announced a cease and desist order has been issued to All American Health Care Association and their agents who are allegedly selling fake health plans in Montana. Monida turned the company in to the State Auditor's Office after receiving solicitations from them over the fax.
"I would like to thank Monida for their vigilance in stopping this problem," said State Auditor John Morrison. "Because of their efforts, we were able to stop a company from operating and defrauding Montana citizens."
Last month Morrison announced a cease and desist on 14 entities and their agents allegedly selling fake health plans in Montana. Morrison was joined by officials from Saint Vincent Healthcare and Deaconess Billings Clinic. Since the story was in the Montana media, the State Auditor's Office Policyholder Services Division received over 50 calls from small Montana businesses and individuals who had either bought or been contacted by an entity selling fake health plans.
"Fake health insurance programs and phony discount cards are stealing money from Montana businesses and employees. Stopping them is a top priority," said State Auditor and Insurance Commissioner John Morrison. "By misrepresenting these plans as 'health insurance' these scams take advantage of a vulnerable segment of our population, the uninsured and the families and businesses struggling with high insurance premiums."
Morrison and Drapes also emphasized that hospitals and other health care providers are hurt when medical services go unpaid. "We were happy to see Commissioner Morrison take such swift action against this company," said Drapes. "At a time, when we are all putting major resources into providing health care and insurance for those who need it, it is very troubling to see scam artists moving into health care to take advantage of that situation. By stopping these companies from selling fake plans in Montana one of the most important issues in the health insurance market is being addressed, cost shifting. When these companies sell these fake plans, not only does the consumer lose money, but also the hospital and all Montanans who pay insurance, because in the end it is those people who foot the bill."
Morrison, Drapes, and Gardner offered the following advise to consumers: These solicitations are very deceiving. They look like advertisements for health insurance, but offer things such as "all pre-existing conditions accepted", "no restrictions", "everyone accepted", "no health questions" and "no deductibles". They include typical insurance company terms, such as "individual and family coverage", "open enrollment", or phone numbers for businesses to contact their "group" department. And they issue membership ID cards that look just like an insurance company's. They appeal to consumers by offering coverage for doctor visits, hospital visits, emergency room care, home healthcare, dental, vision, chiropractic, accidental death and dismemberment, prescription cards, and other healthcare services, often for around $100 per month. It's hard enough when families can't get health insurance; don't be mislead into paying hard-earned wages to a fraud.
The respondent allegedly advertised via unsolicited facsimiles. Plans like this are also frequently advertised in newspapers or by "cold calls". The plans are typically promoted as low-cost health insurance and marketed to small businesses who want to provide some health coverage to employees, people who are uninsured, and those who are self-employed. In fact, the programs do not provide the coverage promised and consumers are stuck with unpaid medical bills.
In a recent study conducted by the General Accounting Office (GAO) it was found that 144 fake health insurers sold more than 200,000 bogus policies between 2000 and 2002 resulting in $252 million in unpaid claims. In the same time period it is estimated that the number of fake insurers has doubled.
Early detection and aggressive oversight are keys to successfully addressing this important issue. To avoid being a victim of a health insurance scam:
1. Verify, before you buy. Contact the Montana State Insurance Department to verify that the plan and agent are licensed in Montana. You can call the Montana State Insurance Department at 1-800-332-6148.
2. Be Alert. If is seems too good to be true, then it is.
3. Act fast. Typically phony health plans will not pay medical bills or will only pay small ones. If you find that your health insurance is not paying you medical bills in a timely fashion, call the Montana State Insurance Department. You need to call fast and report what is happening to you. Remember, it is better to be safe than sorry.
For any questions regarding insurance please call the Montana State Auditor's Office at 1-800-332-6148.