According to an October 2009 survey conducted by the Coalition Against Insurance Fraud, 57 percent of state fraud bureaus reported a higher incidence of health insurance fraud in 2009 compared to the previous year. The increase was largely attributed to “unauthorized entities selling fake coverage” and “the rise of medical discount plans.”

Companies such as HealthcareOne/Elite Healthcare, Consolidated Workers Association, and Smart Data Solutions/American Trade Association, have all recently come under fire from state regulators for peddling worthless coverage or discount medical plans, instead of actual insurance, to thousands of consumers.

The trend aims to continue as BBB is hearing more and more consumers complain of phony healthcare plans being sold as a result of President Obama signing off on healthcare reform earlier this year. These plans are being sold door-to-door, over the phone and through e-mail and fax transmission. 

For example in Missouri, the state Insurance Director warned that a door-to-door salesman was claiming to be a federal agent selling insurance under the new law. The best thing for consumers to do is to visit BBB.org and check the reliability of the company BEFORE signing off on a contract or writing a check.