The Obamacare insurance exchanges that opened this week have inspired diverse and spirited debate, but insurance fraud experts say they have also inspired something more sinister: identity theft.
Though official estimates have not been released, the advocacy organization Coalition Against Insurance Fraud said it is expecting an influx of scams aimed at stealing personal financial and identification information. These scam artists are capitalizing on the confusion surrounding the Affordable Care Act, said communications director Jim Quiggle, and producers have an important role to play in ensuring they aren’t successful.
“Agents and brokers will need to be highly informed consumer advisors who can spot a fake navigator or a fake website…and proactively warn their clients about all the scams they could be facing,” Quiggle said. “The consumers are going to look to them to be an informal kind of navigator who can help them through the exchange website and answer questions if they start getting suspicious email or phone calls.”
So what do producers need to look out for?
Quiggle says that the most financially destructive scam currently running is the “fake navigator.” Navigators are federally-appointed guides charged with helping users understand and effectively use the new insurance exchanges.
Some con artists, however, are cold-calling and visiting people’s homes pretending to be federal navigators. They may ask for credit card, bank account or social security numbers in order to help consumers “sign up” for federally-mandated healthcare.
“[Fake navigators] are potentially the most insidious because they have face-to-face contact with consumers who are confused about health reform and look to a navigator to help them negotiate this complex world,” Quiggle said.
Quiggle noted that con artists are most likely to target seniors, who are usually home during the day and are largely confused about requirements under the ACA.
Even existing navigators could pose a threat. Because the federal government and most states didn’t require navigators to undergo a background check before being appointed, there could well be a few unscrupulous individuals in the bunch. Fortunately, there is a quick way to spot a scam.
“Navigators are required to not ask for personal financial information or charge fees, so the moment somebody does ask for payments, you know you have a con,” Quiggle said.
States that have designed their own exchanges are particularly vulnerable to scam artists, as governments had to scramble to hire a large number of navigators at the last minute. California, for example, hired 20,000 navigators within three months.
Fake exchange websites are also a problem. These seemingly authentic websites, with domain names very similar to the official state or federal site, require users to input financial information in order to become “enrolled.”
Quiggle says it’s too early in the game to comment on specific instances of fraud, but expects a large insurgence with the exchanges’ growing popularity.
“It’s going to get more fascinating as things go on,” he said.