For Scammers, Obamacare Rollout a Fresh Opportunity to Strike Consumer advocates and security experts warn that the implementation of the new health-care changes will create opportunities for fraudsters to steal consumers' money and personal information.

By Herb Weisbaum

This story originally appeared on CNBC

REUTERS/Kevin Lamarque
President Obama

As the debate rages over who benefits from the Affordable Care Act, one thing is becoming clear: The controversial program is a dream come true for rip-off artists.

Consumer experts warn that the program has created a huge opportunity for swindling people by stealing their money and their sensitive personal information.

"Any time you roll out a big government program like this, confusion is inevitable," said Lois Greisman, an associate director in the Bureau of Consumer Protection at the Federal Trade Commission. "This confusion creates a tremendous opportunity for the fraudster."

Scammers have been at it for more than a year now, but consumer advocates and security experts warn that the problem will worsen as we get closer to Oct. 1. That's when the millions of uninsured Americans can use a health insurance exchange, set-up by their state or by the federal government, to shop for coverage.

"I believe the incidents are going to skyrocket as that date approaches," said Eva Velasquez, president and CEO of the nonprofit Identity Theft Resource Center. "And even people who are smart and savvy could get taken, so we are very concerned about the potential for some serious financial harm."

The Affordable Care Act created a Health Insurance Marketplace, also referred to as the Health Insurance Exchange. Policies in the exchange have been preapproved by each state's insurance commissioner.

"There are fake exchanges already up and running on the Internet," said Monica Lindeen, Montana's Commissioner of Securities and Insurance. "If you do a search and type in 'exchange,' you'll find all sorts of websites that claim to be in the exchange when they are not."

These health insurance exchanges don't open for business until Oct. 1, so no one can sell you insurance through an exchange until then.

Scam artists got an early jump on national health care reform. Since last year, they've been calling, faxing and emailing people across the country claiming to be with Medicare, Obamacare or some agency of the federal government.

They often say they need to "verify" some personal information (typically a bank account or Social Security number) to ensure you get the proper benefits. In some cases, fraudsters tell victims they need to buy an insurance card to be eligible for coverage under the new program.

Such calls can be especially intimidating to seniors, said John Breyault, who runsFraud.org , a project of National Consumers League.

"We've heard about cases where the scam artists have threatened people with jail if they don't purchase the fake insurance cards," Breyault said.

Americans don't need a new Medicare card, and no one from the government is calling and asking for personal information or money. Under the individual mandate provision of the Affordable Care Act, people who don't buy insurance could have to pay a penalty, but that provision does not take effect until next year. There is no jail penalty in the law.

A con artist can claim to be anyone, for instance a "navigator" who can help you apply for coverage through an exchange. They gain your trust and then ask for personal information to buy nonexistent policies. Fraud.org reports that some victims have been persuaded to wire money or send funds via prepaid debit card to get their full benefits.

Thousands of legitimate navigators are being trained and certified to guide people through the process of applying for coverage through an exchange. These navigators are prohibited from recommending a particular plan. They will never ask for personal information or for money in any form. The navigator program hasn't started yet, so no one is making calls.

Don't get taken

There is only one place to shop for a qualified health plan: HealthCare.gov, the site run by the Center for Medicare and Medicaid Services. You also want to start your search here if you live in one of the places (17 states, District of Columbia, Guam or American Samoa), that set up its own exchange. Customer service representatives are available at 1 (800) 318-2596.

These tips, provided by consumer groups and government, will help you spot a fraud: --There is no card associated with health care reform. --There is no new Medicare card, and you do not have to update any personal information. --The Health Insurance Marketplace (those exchanges) doesn't open until Oct. 1, so you can't buy coverage under the Affordable Care Act until then. --Don't respond to a cold call of any kind, especially one that asks for personal information or money. And don't trust caller ID, which can be rigged to make it look as if the call is coming from a government office. --Don't let anyone rush you. The rates in the exchange have been preapproved and won't change during the initial enrollment period, Oct. 1 to March 31. Anyone promising a "special price" or "limited time offer" or who tells you "spots are limited" is lying.

The FTC's Lois Greisman urges you to file a complaint if you spot a problem, get a suspicious call or fall victim to a health care insurance con artist.

Herb Weisbaum is a reporter at CNBC.com.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Living

The 3 Lifestyle Habits That Made Me Sharper, Stronger and More Successful

These three simple yet powerful lifestyle changes transformed my productivity, energy and mindset. Here's how you can do the same.

Living

Inspired by the Masters? Bring Your Work Hustle to the Golf Course with Mind Caddie, Now $99.99.

If the Masters made you realize that your game needs work, check out this performance coaching audio app.

Business Solutions

Generate 1,000+ Marketing Images This Month: 1min.AI Now $79.97 for Life

Get all of your favorite AI assistants in one place under one subscription with 1min.AI.

Leadership

Everyone Needs a Mentor — But Being a Mentor Is Just as Important. Here's Why.

Mentorship isn't just about sharing knowledge. Here's why mentoring others could be your most valuable growth tool as an entrepreneur.

Business News

What's Open on Easter Sunday? Costco and Target Will Close, But One Major Retailer Will Be Open. Here's What To Know.

The stock market was closed for Good Friday on April 18. Here's what's closed for Easter Sunday, April 20.