Insurance commissioner launches ad campaign to warn of phony health insurance

<p>The state Insurance Commissioner's Office is beginning a radio and television public service ad campaign to warn of illegal health insurance schemes targeting Georgians.</p><p>Federal and state agencies say 144 firms in the U.S. sold phony insurance to thousands of employers and individuals from 2000 through 2002 and left at least $252 million in unpaid medical claims.</p><p>The Southeast is a major playing ground for these companies. A report by the General Accounting Office, the investigative arm of Congress, says that of the seven states with 25 or more of these companies, five are in the South.</p><p>Georgia ranked seventh nationally.</p><p>The Insurance Commission ads are funded, in part, by the Georgia Association of Health Plans, a health insurance trade group. It begins Thursday and will run statewide through May.</p><p>The GAO report, released in March, said 25 sham insurers operated in Georgia from 2000 through 2002. Insurance Commissioner John Oxendine says that number has jumped to 30.</p><p>Recoveries can be difficult because assets often have been spent or have disappeared, said Kathryn Allen, director of Medicaid and private health insurance issues at the GAO. Hospitals and physicians who delivered care, she added, "often are left holding the bag, too."</p><p>Insurance premiums have been rising at double-digit percentage rates over the past few years. Small employers and individuals are sometimes lured by below-market rates.</p><p>Oxendine said consumers may see these insurance offers on telephone poles and in direct mail fliers. The fake insurers may pay smaller claims to keep customers paying premiums, but they eventually stop paying all claims.</p><p>The GAO said at least 15,000 employers nationally purchased coverage from fake insurers, affecting more than 200,000 policyholders.</p><p>Oxendine's office said Georgia fraud investigations have resulted in the closure of four bogus operations in four years.</p><p>One plan identified by the GAO report _ Employers Mutual _ collected $16 million from 22,000 policyholders from January 2001 through October 2001. It left more than $24 million in unpaid claims. In Georgia, about 900 consumers were defrauded.</p><p>Oxendine's office issued a cease-and-desist order against Employers Mutual. The federal government is pursuing a civil action against the firm.</p><p>___</p><p>HASH(0x286667c)</p>

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