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Obamacare Scams Flourish

hci-8Obamacare is breeding a host of scams. Fraudsters are already taking advantage of the lack of knowledge on the Affordable Care Act (Obamacare’s official name) to bilk victims. The number of scams is limited only by the seemingly limitless imagination of con artists trying to cash in but here’s the rundown on a few of the most common Obamacare scams.

Popular Obamacare Scams

  • Fake insurance card. Scam artists are selling cards promising that you are enrolled in Obamacare. The major problem with this is that Obamacare benefits are not yet available. They will not be available until January 2014. The only way you can get the benefits is if purchase a policy through a health insurance exchange. The exchanges are not up and running yet.
  • Buy Obamacare or else. This is a particularly vicious scam in which a predator tells a person that he or she will go to jail they don’t buy the Obamacare card. The problem with this is that the only penalty the Affordable Care Act provides for not having health insurance is a penalty that will be added to your income tax. You cannot be sent to jail for violating the health insurance mandate. It should also be noted that the health insurance mandate will become effect until January 1, 2014. Report anybody selling such cards to the police, they are committing extortion.
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  • The fake exchange scam. Currently there are no Obamacare health insurance exchanges up and running in the United States. Unfortunately some scam artists have set up fake exchanges. No exchange is supposed to be in operation until October 1. After that
you’ll only be able to buy policies using the tax credit through the official exchanges. You will have to qualify for the tax credit before participating in the exchange. Any “exchange” asking for a fee up front is a scam. The Healthcare.gov website can help you locate the official website for your state’s exchange.
  • Junk health insurance and fake health insurance are low cost policies that provide a very low level of benefits. An example is a policy that pays $500 to help cover medical costs. Anybody who’s been to a doctor in the last 10 years knows that’s not enough to cover most medical procedures. Be particularly leery of any policy with a premium less than $100-$200. Something to be aware of is that a person who buys junk health insurance may still be hit with the health insurance mandate penalty because the policy doesn’t qualify as health insurance. Junk health insurance is peddled by some agents and some companies, particularly temporary agencies that try to sell to their employers.
  • Discount plans. These are a legitimate products that get you a discount on medical care or prescription drugs, but they are not health insurance. Some cons misrepresent discount plans as health insurance. Fraudsters are just gearing up for Obamacare and are going to be all over the place peddling all sorts of junk insurance and fake insurance. A good rule of thumb is do not start shopping for health insurance until October when the health insurance exchanges open and then only shop through the official state exchanges.