FTC, states sue bogus health insurers

Cincinnati.com also reported this morning that "The Federal Trade Commission and 24 states, including Ohio & Indiana, filed 54 lawsuits or regulatory actions against companies selling 'medical discount plans' alleged to be bogus." The plans, which David Vladeck, director of the FTC's Bureau of Consumer Protection, and state officials said were marketed to an estimated 47 million uninsured Americans, often provided no benefits.

"The health-care overhaul, signed into law by President Barack Obama in March, has created the potential for fraud, Vladeck said, because the major provisions to extend coverage to at least 32 million people don't go into effect until 2014.'I think the uncertainty about the benefits that will be available under the federal insurance program, and the fact it doesn't kick in until 2014, is giving scammers very fertile ground for this…They're trying to capitalize on the uncertainty.'"

An MSNBC article said "the Obama administration is trying to prevent companies from taking advantage of consumers in the wake of the health reform passage, including warning traditional insurers not to use the law as an opportunity to push through big rate increases."

The FTC filed three cases charging companies with deceptively marketing medical discount plans. Their announcement, yesterday, links to the particulars of those three cases along with a summary of the state law enforcement initiatives.