Insurance Fraud Booms, Led By Health Insurance Scams


The sour economy is producing a bumper crop of cash-strapped consumers, business owners, and shady agents who are fueling a wave of insurance fraud that’s keeping regulators and law enforcement officials busy, McClatchy Newspapers report. Whether it’s worthless health plans peddled by fax, staged auto accidents, arson or slip-and-fall accidents at the local mall, insurance fraud is booming and consumers are paying the price in higher premiums.

Fewer than one-quarter of 1 percent of the national annual total of 48 million insurance claims are referred to the National Insurance Crime Bureau for investigation of possible fraud; last year, that was more than 85,000 questionable claims, up 14 percent from 2008. Leading the way was the sale of bogus health insurance plans. With 50 million uninsured Americans and confusion about the health care debate, state insurance regulators have their hands full keeping up with scam artists. “So here you have people in desperate circumstances, and they’re getting these faxes that are promising them the moon and complete coverage at low costs and they want to believe, so they buy it. But it’s just a scam. It’s a total scam. It’s just a maddening, frustrating, unfortunate circumstance,” said Oklahoma Insurance Commissioner Kim Holland.

Comments are closed.