How to Protect Seniors From Health Insurance Scams

Magaly Olivero

Health insurance scams that target older Americans can jeopardize their health -- and devastate their bank account and self-esteem.

"We receive complaints from consumers all the time," says Patricia Poss, senior attorney with the Division of Marketing Practices for the Federal Trade Commission's Bureau of Consumer Protection. "There are dishonest marketers out there who pose as representatives from Medicare."

Most scams involve telemarketing, mailings or emails offering bogus health insurance or medical equipment that require people to divulge their Medicare or bank account information. In one recent case, the FTC shut down an alleged telemarketing scam that asked older adults to verify their bank account numbers in order to receive a new Medicare card. Within weeks, the victims' bank accounts were drained of hundreds of dollars.

Schemes that milk billions of dollars a year from the federal government through fraudulent claims made by white-collar criminals or organized crime are also prevalent, says Sally Hurme, project advisor with AARP's education and outreach department. "Medicare fraud is an enormous industry," she says. For example, a doctor visiting 20 nursing home patients may seek reimbursement for spending one hour with each individual, when the visits actually only lasted a few minutes.

Experts offer these tips to keep the con artists at bay:

Protect your medical identity. Never share personal or financial information with a stranger, whether you're contacted by phone, mail or online. Only give your insurance information to those who have provided you with medical services.

"Guard your Medicare number as closely as you would any other personal identifier," Hurme says. She recommends beneficiaries keep their Medicare card at home and instead carry a copy of the card with all but the last four numbers scratched out.

Beware of "free" services. "There's often some kind of trade-off anytime someone offers something for free," says Melissa Simpson, program manager of the Center for Benefits Access at the National Council on Aging. "They're usually after your Medicare numbers."

Hurme warns consumers to beware of community recruiters who direct people to storefront clinics for free medical care. "They want to draw people to the clinic, so they give up their Medicare number," she says.

Another type of fraud involves medical equipment manufacturers, like companies that offer free diabetes testing supplies. These vendors then charge Medicare or private insurers for products that were not needed or perhaps never delivered.

"We've gotten reports from people who had closets full of supplies that they didn't know what to do with," Simpson says.

Review your Medicare summary notice. Carefully check the quarterly Medicare "summary notice" mailed to your home to verify the accuracy of your doctor visits, hospital stays and medical care. Some health care providers, for example, may charge for services that were never rendered.

"This summary tells you every claim that has been made to Medicare on your account," Hurme says. "If the summary says you went to the doctor when you didn't or you got a heart transplant when you actually got a flu shot, then you know there's a problem."

If you notice an error, immediately contact the health care provider. "It could just be an honest mistake that can easily be corrected," Simpson says. But if the provider balks, it may be time to notify the authorities of a possible scam.

For help understanding your Medicare summary notice, check out AARP's decoder. Another valuable resource is the Senior Medicare Patrol, which offers a list of state-specific fraud schemes and a tutorial on how to read the Medicare summary notice.

Choose supplemental insurance plans carefully. Legitimate Medicare supplement insurance polices -- also known as Medigap -- help pay for some health care costs that aren't covered by traditional Medicare. These plans, however, require approval from the federal government. "There are devious players who try to sell supplemental insurance plans that aren't certified by Medicare or don't provide appropriate coverage," Hurme says.

Avoid phony prescription coverage. Look out for bogus prescription plans or coupons that promise to offer discounted coverage compared to Medicare's prescription plan (known as Part D). Beneficiaries who drop their prescription Medicare Part D coverage typically get hit with a "triple whammy," Hurme says. "They spend their money, get a false prescription plan and then must pay a penalty if they want to go back to Medicare Part D."

Confirm the details. Make sure you fully understand the terms of the health insurance product you're purchasing. "A legitimate plan will be willing to point you to written information and give you a chance to check things out before you actually enroll," Poss says.

Speak up. Report suspicious activity to local police, the state attorney general, the Centers for Medicare and Medicaid Services or the Federal Trade Commission. AARP has a fraud watch network with an interactive map tailored to each state. Consumers can also sign up to receive watchdog alerts from AARP.