Avoiding discount health care scams

Buyers beware: The discount health care industry has been fraught with scams, industry observers said.

"Unfortunately, so many plans are rife with fraud and deception, consumers are on their own to determine if they have bought something legitimate or another pound of fool's gold," said James Quiggle, spokesman for the Coalition Against Insurance Fraud.

The industry has been "very controversial," said Wendell Potter, a former insurance executive who is senior fellow on health care at the Center for Media and Democracy in Madison, Wis.

"A lot of them are here today and gone tomorrow," said Potter, who is also a consultant for Transparent Health Network. "They have frustrated a lot of insurance commissioners all over the country . . . They're like Whac-a-Mole. They go away and come back to do the same kind of deception."

But that may be changing. Allen Erenbaum, counsel for the Consumer Health Alliance, a nationwide trade group for the industry, said more than 30 states have passed laws regulating discount health care providers in the past several years, although New York is not among them.

Quiggle and Potter said consumers should read the fine print before signing up and call health care providers listed by the plan to see if they actually are part of the network.

They also should beware of:

Language that implies insurance is being offered.

Hidden fees or exceptions.

Huge discounts that seem too good to be true.

No way to get in touch with a real person.

Difficulty quitting the plan.

For complaints, contact the state Attorney General's health care bureau hotline: 800-428- 9071.