Fraudsters taking advantage of new health care law; HHS also announces new benefits

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Scam alert issued on new health care law

WASHINGTON — Beware of scam artists taking advantage of the new health insurance law to peddle phony policies, President Barack Obama’s top health official warned consumers Tuesday.

Health and Human Services Secretary Kathleen Sebelius issued the fraud alert as she also announced new benefits for seniors and low-income people.

If the yearlong congressional saga that produced the sweeping insurance remake was murky and confusing, Sebelius vowed that her process for putting the law into effect will be the opposite — understandable to a typical consumer. “As soon as we know something, we’re going to tell you,” she promised Tuesday.

She’ll have plenty of time to convince the legislation’s many skeptics, with four years to go until its major expansion of coverage. In the meantime, expect a steady stream of updates on the nearly $1 trillion, ten-year law that will eventually provide coverage to almost all Americans. Modest benefits kick in quickly.

Speaking at the National Press Club on Tuesday, Sebelius sought to head off a potential consumer problem. After Obama signed the law March 23, there’s been a proliferation of scams involving bogus health insurance policies.

Some of the hustlers are going door to door claiming there’s a limited open-enrollment period to buy health insurance now. Not so. Moreover, even after new health insurance marketplaces open for business in 2014, door-to-door salespeople are unlikely to be part of the outreach. Scam artists have also set up toll-free lines.

Sebelius, a former Kansas governor and insurance commissioner, wrote state officials Tuesday to urge they investigate and prosecute such scams to the fullest. Federal health care fraud investigators are also on the lookout.

“Unfortunately, scam artists and criminals may be using the passage of these historic reforms as an opportunity to confuse and defraud the public,” Sebelius wrote state insurance commissioners and attorneys general.

The new health care law will ultimately provide coverage to more than 30 million uninsured, but those changes will come slowly, beginning with smaller steps.

As early as the summer, people who have been turned down for coverage because of a medical problem will be able to buy a plan through a new high-risk health insurance pool. Many states already operate such pools, but the coverage is expensive, and only about 200,000 are signed up. The new health care law provides an infusion of federal dollars to bring down costs and cover more people.

Then in the fall, two other consumer benefits take effect. Insurance plans will no longer be able to deny coverage to children with medical problems. And parents will be able to keep their adult children on their policies until they turn 26.

While those measures may make a big difference for particular families, experts say it will only lead to a small decline in the number of uninsured people, which now is nearly 50 million.

The big push to cover the uninsured comes in 2014, when new health insurance marketplaces will open for business and federal tax credits will start flowing to millions of working families and individuals. At the same time, Medicaid will be expanded to more people living near the poverty line. And health insurers will have to accept all applicants, even those with medical problems.

Once those tax credits and new consumer protections are in place, most Americans will be required to carry health insurance.

Sebelius also announced two additional benefits:

— Seniors who have signed up for private insurance plans through the Medicare Advantage program will be helped by new limits on their out-of-pocket costs. Some of the plans charge high copayments for certain Medicare services, including short term nursing home care.

— States that cover low-income childless adults through their Medicaid programs will be able to tap into a federal fund for financial assistance.

Recent polls show a majority of Americans disapprove of the legislation, fearing it will raise their costs.