Health Plan Scams Spread Misery

Cora Nucci, for HealthLeaders Media , August 18, 2010

So-called discount health plan scams are proliferating under near-perfect conditions: economic stress, high unemployment rates, and the regulatory turbulence stemming from healthcare reform legislation. And it's not consumers alone who are being preyed upon.  Providers and hospitals are being defrauded.

Medical discount plans are so bad in the eyes of the California Medical Association, that the group has opposed attempts at regulation and licensing. 

Sure enough, the matter of regulation was on the agenda at this month's Seattle meeting of the National Association of Insurance Commissioners (NAIC). The group's Antifraud Task Force intends to draft a national standard that discount plans would have to meet to do business and the NAIC plans to "look further into what regulators can do" to address the rash of scams, the group's web site says.

It shouldn't bother. Discount plans prey on poorly informed consumers and create service delays and headaches for busy providers. Only the issuers stand to benefit from these bogus health insurance plans. Regulation would unleash even more misery on hospitals, providers, and consumers.

Cora Nucci is the Digital Associate Editorial Director for HealthLeaders Media.

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