Statement issued Thursday:
Indiana Attorney General Greg Zoeller warns Hoosiers that scam artists might defraud residents into buying phony health insurance policies by claiming the new federal health care law makes such purchases mandatory now. It does not; but misunderstanding about the new law creates an opening for scammers to exploit consumers’ fears, Zoeller said.
“It comes as little surprise that the federal government’s requirement that individuals buy health insurance starting in 2014 would embolden scammers to defraud people into buying it needlessly now,” Zoeller said. “The Indiana Attorney General’s Office has not yet received complaints of salespeople pushing dubious or phony health insurance policies onto Hoosiers. But the situation is ripe for fraudsters to sow misunderstandings among the public and then sell them worthless financial products.”
On Tuesday, U.S. Department of Health and Human Services Secretary Kathleen Sebelius sent a letter to state attorneys general nationwide. The letter warns that HHS has received reports of scammers going door-to-door selling phony insurance policies and urging people to obtain coverage during a non-existent “limited enrollment” period they falsely claim the new law created. Sebelius’ letter urges state authorities to investigate any such scams if they surface.
Zoeller said the Attorney General’s Consumer Protection Division stands ready to investigate scams and assist anyone who has received such unsolicited sales offers. Beyond violating Indiana’s own state insurance regulations, phony health insurance offers could violate Indiana’s law in other ways. Offers made through telephone solicitors or robo-calls potentially might violate some of Indiana’s Telephone Privacy statutes. Hoosiers can lodge a complaint at www.IndianaConsumer.com or by calling 1.800.382.5516.
The new federal healthcare law passed in March contains a mandate that individuals who don’t already have health coverage must purchase a commercial insurance product from a private company starting in 2014. That is when states will be required to start operating insurance exchanges where insurance companies will offer health policies that uninsured individuals can purchase.
“That mandate is three years away, and while many details still are unknown, I would be extremely surprised if door-to-door salespeople would be enlisted to sell plans under this scheme,” said Deputy Attorney General Abigail Kuzma, director of the Consumer Protection Division. “People who want private insurance coverage now and don’t qualify for a public plan should consult with established, licensed insurance agents and obtain multiple quotes before buying any policy, even short-term.”
Indiana’s acting Insurance Commissioner Doug Webber stated that to sell insurance in Indiana, a company and its agents must be licensed. In addition, healthcare products must be filed with the Indiana Department of Insurance for pre-approval. Consumers can verify licensing and pre-approval by contacting the Department of Insurance website at http://www.IN.gov/idoi or by calling (800) 622-4461.
The individual mandate is one of the grounds for Indiana’s participation in a multi-state legal challenge to the federal healthcare law. Other grounds for Indiana’s joining the lawsuit are that the new law encroaches upon the state’s sovereignty, by requiring state government to operate a federal insurance-exchange program. The legal challenge is filed in U.S. District Court in Florida with 16 states – including Indiana – participating as plaintiffs. Zoeller said the case ought to be heard and decided by the United States Supreme Court.