NU Online News Service, Feb.18, 11:27 a.m.EST

The spreading epidemic of bogus health plans is hitting smallbusinesses as well as consumers, a spokesman for the CoalitionAgainst Insurance Fraud said.

"Though the examples that have surfaced tend to involveconsumers, small businesses have been targeted and even referencedin state announcements of crackdowns. Small businesses andself-employeds are struggling to find affordable premiums forthemselves and their employees, and thus are logical targets forsales pitches," explained James Quiggle, Coalition director ofcommunications.

According to the Coalition, which has lately been callingattention to health scams as the biggest insurance fraud problem,bogus plans are spreading rapidly around the nation, defraudingvulnerable consumers seeking affordable health coverage in adownturned economy.

Fraudulent health plans, one of the negative byproducts of therecession, "are the largest and fastest-spreading insurance scam,"according to the Coalition.

The organization noted "Most states have been forced to issueemergency cease-and-desist orders, lawsuits or other actions overthe last two years..."

Some consumers have faced thousands of dollars in medical billswhen their purported health plans wouldn't pay up. Well over 12,000victims have been defrauded nationally, the Coalition estimated,with damage ranging from stolen premiums to large, unpaid medicalbills.

Bogus plans, it was explained, typically promise full healthbenefits but fraudulently deliver lesser products such as:

oFake coverage that's a worthless piece of paper.

oLimited-benefit policies that can be nearly useless.

o Medical discount cards that merely offer price breaks onmedical services for which buyers pay from their own pockets.

The Coalition said as many as 50 million Americans have nohealth insurance and with health premiums rising and layoffscontinuing, many are struggling to find -- and afford -- healthcoverage. Many people thus fall for sales pitches promisingappealing insurance deals, it advised.

Small businesses, individual consumers, families, seniors andrecent immigrants have all been seen as targets.

Typically, the Coalition said, bogus plans promise full healthcoverage, affordable premiums, and easy signup regardless ofpreexisting conditions. Victims often must join a fake tradeassociation or union. This ploy, it was explained, reinforces theillusion of affordable and legitimate group health coverage.

The scams pitch consumers with insurance agents, telemarketing,blast faxes, TV ads, emails and even crudely printed signs stapledto telephone poles. Web sites encourage easy online signup andenhance the appearance of legitimacy, the Coalition related.

It advised consumers to do their homework before signing up,especially if being pressured and to check with their stateinsurance department whether the plan is licensed and if it hasbeen the subject of complaints.

Buyers should also insist on receiving the entire policy -- nota summary or brochure -- and understand it thoroughly beforesigning up. They should also be certain the plan is exactly asadvertised: full health coverage, limited-benefit or medicaldiscount card.