Consumer Groups Warn NAIC On Health Scams, Rising Property Rates
Bestwire
September 10, 2002

As health insurance premiums rise, so does the susceptibility of employers to health insurance scams, a consumer representative told the National Association of Insurance Commissioners. "Phony" health plans are a growing epidemic, said Mila Kofman, of the Georgetown University Institute for Health Care Research & Policy. "Sham" association health plans target small employers and are thriving now, as they did in the late 1980s and early 1990s, because employers are desperate to find a way to cope with the price hikes, she said. But unlike before, this newer breed of association health-plan scams is nationwide and the organizers "are not afraid," Kofman said during the NAIC's Fall National Meeting in New Orleans. "Many are repeat offenders who did not do jail time before," she said. The fake health plans collect premiums for nonexistent health insurance, with the number of victims in the tens of thousands now, and sure to grow to hundreds of thousands, Kofman warned.

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[Deborah Goldberg of the Neighborhood Revitalization Project in Washington, D.C.] thanked the NAIC for agreeing to study recommendations made by Americans for Insurance Reform, which is calling for stronger state regulation to protect consumers from excessive insurance rates. AIR wants insurance commissioners to freeze homeowners and medical-malpractice insurance rates--two lines that have been hit particularly hard. Freezing rates isn't something all insurance commissioners have the authority to do, said Oregon Insurance Administrator Joel Ario. In a July 30 letter, AIR blamed industry "mismanagement" for "price-gouging and tight underwriting," especially in homeowners and medical-malpractice lines.

For a copy of the complete article, contact AIR.