Thursday, September 26, 2013


Insurance Commissioner Warns Consumers to Be On Alert

Since the Affordable Care Act (ACA) was signed into law in March 2010, unscrupulous scammers have been creating ways to take advantage of consumers’ uncertainty surrounding the law. Posing as insurance agents or representatives of the federal government, these scam artists try to sell fraudulent policies or obtain sensitive information like Social Security and bank account numbers. The National Association of Insurance Commissioners and the Iowa Insurance Division are warning consumers about common red flags and providing tips on how to avoid being the victim of a scam.

Health Insurance Marketplaces
One of the largest components of the ACA is the creation of new health insurance marketplaces, or exchanges. These online portals ask consumers to enter information about themselves and select the level of coverage they desire to receive a list of plans they can purchase. Iowa is partnering with the federal government, which is running the Iowa Health Insurance Marketplace.

Open enrollment in the new marketplaces begins October 1. However, bogus websites that purport to be part of the exchanges have been appearing online for more than a year. Do not enter any personal or financial information into a website that says you can purchase a policy before the open enrollment period.  You can find a link to the Iowa Marketplace at

New “Obamacare” Insurance or Medicare Cards
Another common ploy involves unsolicited calls from scammers who claim to have your new “Obamacare” insurance card – they just need to get some information before they can send it to you. The caller then asks for credit card numbers, bank account information or your Social Security number. A variation of this trick specifically targets seniors on Medicare; the caller claims that in order for them to get their new Medicare card and continue receiving their benefits, they must verify their bank account and routing numbers. Some callers ask for their Medicare numbers, which are identical to Social Security numbers.

“You are not required to obtain a new insurance or Medicare card under the ACA,” said Insurance Commissioner Nick Gerhart. “Also, anyone who is a legitimate representative of the federal government will already have your personal and financial information and should not ask you to provide it.”

Don't Be Misled
Here are some other important “red flags” to watch out for:

  • The salesperson says the premium offer is only good for a limited time.
    • Enrollment in the exchanges will be open from Oct. 1 to March 31, and rates for plans in the exchanges will have been approved for the entire enrollment period. Be skeptical of someone who is trying to pressure you into buying a policy because the rate is only good for a short time. Remember: if the offer sounds too good to be true, it probably is.
  • The salesperson says you could go to jail for not having health insurance.
    • Starting in 2014, all Americans will be required to have health insurance. You will not face jail time if you do not purchase health insurance. However, those who remain uninsured and do not qualify for any exemptions will face a penalty of $95 (for each adult) or 1% of family income, whichever is greater. In 2015, the penalty will increase to $325 per adult or 2% of family income, and in 2016 and beyond, the penalty will be $695 per adult or 2.5% of family income. For more information on the individual shared responsibility provision of the ACA, click here.
  • You receive an unsolicited phone call or email from someone trying to sell insurance.

The federal government and Iowa regulators will not be contacting individual consumers to sell them insurance. Do not give any sensitive information to anyone who claims to be with the federal government, the Iowa Insurance Division or a navigator for Iowa’s exchange.  

Protect Yourself
The best way to protect yourself from insurance fraud is to research the agent and company you’re considering. Always STOP before writing a check, signing a contract or giving out personal information. CALL  theIowa Insurance Department at 877-955-1212 or visit the state website at www.iid.state.ia.usand CONFIRM that the agent and company are licensed to write insurance in Iowa.

More Information
For more information on the National Insurance Commissioners Association’s activity on healthcare reform, visit the Healthcare Reform Special Section. You can find more information on the ACA on the HHS website.

About the Iowa Insurance Division

The Iowa Insurance Division (IID) has general control, supervision and direction over all insurance and securities business transacted in the state, and enforces Iowa’s insurance and securities laws and regulations. The IID investigates consumer complaints and prosecutes companies, agents and brokers engaging in unfair trade practices. Consumers with insurance or securities-related questions or complaints may contact the IID toll free at 877-955-1212 or visit the Division on the web at