The prohibitive cost of healthcare insurance has increasingly spawned schemes to offer products purporting to be insurance, some of which are outright criminal frauds.

The offers typically include a fairly common set of come-ons: Guaranteed issue, guaranteed rates, no underwriting, choice of any doctor, and monthly premiums at perhaps one half to one quarter of what actual health insurance plans might quote.

Some are little more than discount cards or similar schemes for reduced costs at various medical providers.   Others may contain absolute dollar limitations or other conditions which effectively render them worthless for obtaining anything but the most basic of medical services, excluding any hospitalizations, surgeries, etc.

The fraudulent operators organize around company names which mimic well-known national insurance carriers.   They have reportedly enrolled groups and actually paid claims for awhile, to really set the hook.   They then collect premiums for months, and by the time employers & employees begin to suspect, the game is over.   This type of situation is catastrophic on two counts: First, the premium is lost and in many cases huge amounts of medical bills are owed. Secondly, the group has now been without coverage, and may have developed serious medical conditions which are now of record & will make the obtaining of replacement insurance problematic.

If you are offered a plan at half the cost of competing proposals, resist the temptation to believe. Insurance companies MUST accumulate enough money to pay the bills your providers send or the bills simply don't get paid.

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