MNsure roll-out a ripe opportunity for scammers

John Andrews describes his frugalness as legendary among his family. A husband and father of two, he knows a good deal when he sees one.

But when Andrews noticed recently that his email inbox was quickly filling up with offers to sell him discount health insurance that claimed it would take just a few minutes of his time to sign up, the bargain hunter sent the so-called deals right to his email trash.

"To get coverage, to change coverage is not a simple deal," said Andrews, of St. Paul. "It's a process that takes a while and it's cumbersome. If something sounds too good to be true, it is probably."

The roll-out of the Affordable Care Act, a confusing process for many people, is a dream come true for rip-off artists. The Federal Trade Commission has already investigated nearly 300 consumer complaints nationwide related to insurance scams, including one from Minnesota.

Other people in the state also say they have received false information in the mail, questionable phone pitches and email spam.

• MNsure 101: MPR's essential consumer guide

Consumer advocacy groups and government agencies are urging consumers to keep their private information to themselves to avoid being victimized by scams that aim to cash in on the confusion surrounding the healthcare law.

One complaint to the FTC, filed in June 2013 came from a consumer in Plymouth, who reported receiving a call from someone who claimed to be with "Medicare and ObamaCare." The caller told the consumer that he was eligible for a free Medicare card and tried to get him to verify his bank account information.

Bill Schulz of Fergus Falls said he recently received two letters in the mail from organizations with addresses from a post office box in Washington, D.C.

Schultz said the letters came in brown manila envelopes, "with wording on the envelopes which could lead uninformed or gullible people to believe they were from a federal agency."

He said the letters encouraged him to buy supplemental health insurance to cover what the federal health care law does not. Schultz didn't fall for it, and threw the letters away.

Scam artists have been at it for about a year now, but consumer advocates worry that more people will fall prey to the attempts in coming weeks. On Oct. 1, millions of uninsured Americans will start using health insurance exchanges set up by their states, the federal government or both to shop for coverage.

"Scammers look for confusion. They like it when people aren't quite sure of a new change coming," said Dan Hendrickson, a spokesperson with the Better Business Bureau of Minnesota and North Dakota. "Something like the ACA going into effect is really what they're waiting for."

The Affordable Care Act created a Health Insurance Marketplace, also referred to as the Health Insurance Exchange. In Minnesota, the exchange is called MNsure. Consumer advocacy groups have noted that fake exchanges are already in existence online across the nation.

When consumers search for "exchange" on the Internet, many websites falsely claiming to be an exchange will show up in the search results.

MNsure Executive Director April Todd-Malmlov said senior citizens should particularly be careful.

"MNsure is not for anyone over the age of 65," Todd-Malmlov said. "If people are targeting you and saying MNsure is coming, you have to change your plan, you do not have to change your plan. There is nothing that should be impacting our elderly consumers. MNsure will never be contacting you by phone to request your Social Security number."

MNsure officials also say that they are working with multiple partners, including the Minnesota Department of Commerce, to track fraud and investigate all complaints. Since its call center opened Sept. 3, MNsure has received one complaint from a consumer about a potential scam.

Todd-Malmlov declined to provide any details, but she said the case is under investigation.

The Obama administration also is concerned about consumer fraud related to the health insurance marketplace. On Sept. 18, administration officials announced a new initiative to prevent, protect against and prosecute consumer fraud and privacy violations in the marketplace. The move also is an effort to blunt complaints from Republican critics the administration is not doing enough to protect consumer data.

Attorney General Eric Holder, Health and Human Services Secretary Kathleen Sebelius, Federal Trade Commission chairwoman Edith Ramirez and other federal and state officials met last week at the White House to discuss the security measures and promote anti-scam initiatives.

Federal officials also plan to promote several initiatives, including a new computer system that will verify consumers' identities to prevent taxpayer-funded subsidies from going to criminals. An education blitz will seek to warn consumers what scams to be on the lookout for.

AVOIDING SCAMS

To avoid healthcare scams, the Better Business Bureau and the website fraud.org recommend that consumers:

• Watch out for phone calls from people asking for personal or financial information to receive health coverage or to keep existing insurance coverage. If you didn't initiate the call, don't give out that kind of information.

• Don't believe anyone who threatens you with a fine for not having health insurance. When the penalty for not having health insurance goes into effect in 2014, tax officials will not call to seek payment and consumers will not receive a bill. The fine will be assessed on *federal* income tax returns.

• Don't take seriously any offer of an Affordable Care Act card. The federal government is not distributing such cards or new Medicare cards.

• Do not respond to any request to wire money, disclose your bank account number or load funds onto a prepaid card. If someone claims to represent "Obamacare" asks for such information, it is a scam.

• Be careful of websites that appear to look like official insurance exchange websites. Those sites may be "phishing," attempts by scammers to pose as a legitimate company to fool people into releasing their financial information online. Fake insurance exchange Web sites may contain the actual seal of the real insurance exchanges, but likely simply exist to load malware onto your computer or collect your personal information.

• Inform banks, credit card providers and the three major credit bureaus if they inadvertently divulge personal information to someone engaged in fraud. That will help them be aware of potential identity thieves.