Buyer Beware: Identifying Health Insurance Fraud
A person that has been in the health insurance industry for many years tells his experience in identifying fraud cases to protect consumer and what to look out for.
- Intentional misinformation can happen when a broker is paid solely on commission
- They may be acting in their own best interests, not yours
- A broker may not understand how the insurance groups work (having knowledge of how an insurance group works is important)
- They can use terms like “guaranteed acceptance” or “good driver” to make you sound more attractive as a candidate without having any idea that those are already given perks by certain companies because they have good driving records.
- There are very good brokers that will fight for you as a consumer and advocate for your rights.
- The main issue is that there are some broker agents that have been getting away with this for so long, they have become part of the system and know how it works.
- It is up to us to inform ourselves about our rights and ask questions. The best thing we can do is inquire from other consumers in finding out if they were also scammed by the same broker.
- We can also file complaints against insurance companies if they do not respond in a timely manner, act diligently, conduct thorough investigations, etc. The insurance companies are not necessarily going to be loyal and fair, but the consumer is responsible to seek out legal help and get someone’s attention.
- It is very important that we are well informed about the insurance groups and their brokers. This will help us understand what coverage we may or may not have from a policy standpoint.
- If you have a family that all work in one place, there are usually certain policies that you can request for the entire family. This can save you money over time as you do not have many people paying for individual policies on the same insurance group.
- If something goes wrong with your policy, do not be afraid to speak up. The insurance company may try to talk you into a policy review or change your health care provider.
- Insurance companies do not want you to have good health as they will lose money on you.
- Please be sure to read all the fine print of your policy and rest assured that your agent or broker is representing your best interests and is working for you.
- If you had any suspicions that something wasn't right, do not let this person take advantage of you. Ask them if they are really working for you since they are being paid solely on commission and what type of extra perks they are offering you in order to make the sale.
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Buyer Beware: Identifying Health Insurance Fraud (cont’d)
Summary: This is a solid article that I strongly recommend to the reader. The author is very familiar with health insurance and has been in the industry for many years. He knows all the little tricks that the brokers use to make money off consumers and is not afraid to share his insights with us. It is not uncommon for brokers/agents to have a dual role in their companies. They are either salaried employees or they receive commissions on every sale they make. The problem with being paid solely by commission is that their incentives aren’t aligned with yours as a consumer.
The best way to avoid getting scammed is to communicate with other consumers who have had a similar experience. This will allow you to see if others were also scammed as well. Many times these substandard agents use the same tricks and may use the same selling tactics that weren’t working for them so they keep coming back with more sales methods. It can be extremely frustrating to be taken advantage of by a broker who is paid solely on commission and not working for you, but it is a necessary evil in the insurance industry.
Name of Article: Make Sure Your Insurance Agent is Not Scammed in the State You Live In
Author: Chad Waller
Publisher: seattlehappens.com
- Most state insurance departments will provide you with a list of certified agents in your area. These are people that have their licenses with the state insurance department and work for licensed brokers. The purpose of this article is to make sure you know which one they are, so that you can be sure your agent is not scammed.
- If they have to go through an agency to sign up with an insurance carrier, it can raise some red flags and suggest something may not be right.
- By going through certified agencies, broker agents usually have to have more education. This means they are better equipped in knowing how the insurance industry works. They have to pass classes and tests that qualify them as a broker or agent.
- The difference between a broker agent and an independent agent is that an independent agent sells products from multiple companies or insurance groups whereas a broker sells only one type of product, usually PPO/PPO plans.
- Many times when you are dealing with an independent agent, they will not be paid on commissions and will not be tied in with any specific insurance group because they sell products from all groups. This means insurance groups have nothing to lose or gain from them.
- The best way to know if your agent is working for you is by knowing what group your insurance company belongs to. If they do not know the answer for you, they are not trained well enough in the business.
- The best way to find out if an agent is working for you, and not an insurance group, is to ask him directly. You simply ask them, “who pays you?” If they say the agent (you), then their incentives are aligned with yours and all will be well going forward. It is up to you to make sure you have an agent who is working for you and not the insurance company.
- Make sure they understand your personal situation and if they are clear on what your needs are, it will help alleviate any confusion later on.
- It is very important that you do not accept their first proposal of coverage. If they give you an estimate, fully understand it, and then say “no thank you” simply because it sucks or they want more money than what you anticipated, this tells me that they are trying to take advantage of you. If they don’t know the answer to a question, don’t be afraid to ask them. If they also do not have you covered, but still try and get you to sign up, that is a red flag as well.
- Never, ever accept a policy that is more expensive than what you could get elsewhere for the same coverage. Ask yourself if it is worth spending more money just so your agent can make more commission. Also make sure they fully understand what insurance groups you belong to and which ones are in your states network.
- There are even clauses within some policies that allow brokers to bill you if something goes wrong with your policy and it goes outside of their control.
Conclusion:
- There are hundreds of fraud prevention agencies out there and it is important that you communicate with other consumers who’ve had similar experiences. This will help you to avoid the higher costs from these unscrupulous agents and brokers.
• The difference between a broker agent and an independent agent is that an independent agent sells products from multiple insurance groups whereas a broker sells only one type of product, usually PPO/PPO plans
• Not all insurance agents in your area are certified, so it’s important to do your research before signing up for policies.