February 27,2004

Grassley to Convene Hearing on Growing Problem of Fake Health Insurance

Grassley to Convene Hearing on Growing Problem of Fake Health Insurance

Hearing: “Health Insurance Challenges: Buyer Beware”
Date/time: Wednesday, March 3, 2004, at 9:30 a.m.
Location: 215 Dirksen Senate Office Building, Washington, D.C.

Description: Factors including the rising cost of legitimate health insurance policies have created a environment ripe for fraud by unauthorized firms that offer lower-cost healthinsurance. Thousands of small-business owners and individuals are falling victimto these scams, ending up with millions of dollars in unpaid medical bills. The scamsare especially cruel because the victims often don’t find out their insurance is bogusuntil they’re desperately ill, facing expensive but necessary treatment such aschemotherapy or organ transplants.

Alarmed by growing evidence of these scams across the country, Sen. ChuckGrassley, chairman of the Committee on Finance, and key colleagues asked theGeneral Accounting Office to study the extent of the problem and what’s being doneto stop it. The GAO’s report shows the problem is mushrooming nationwide.Grassley will release the GAO’s report at his hearing.

In addition to witnesses from the GAO, the hearing will include victims of the nowdefunctEmployers Mutual LLC, an unauthorized company that scammed thousandsof people. Among the ploys it used to attract its victims was to have people confuseit with a reputable Iowa insurer, the Employers Mutual Casualty Company.

A witness list follows.

Marie Almond, Victim of unauthorized health insurance plan, Albemarle, N.C.;
Joan Piantadosi, Wife of Albert Piantadosi, victim of unauthorized healthinsurance plan, Deerfield Beach, Fla.;
Kathryn G. Allen, Director, Healthcare -- Medicaid and Private Health InsuranceIssues, U.S. General Accounting Office, Washington, D.C;
Robert J. Cramer, Managing Director, Office of Special Investigations, GeneralAccounting Office, Washington, D.C.;
Ann L. Combs, Assistant Secretary, Department of Labor, Washington, D.C.;
Fred Nepple, Chair of ERISA Working Group, National Association of InsuranceCommissioners, Madison, Wis.;
Jose Montemayor, Commissioner of Insurance, Texas Department of Insurance,Austin, Texas;
Mila Kofman, Assistant Research Professor, Health Policy Institute, GeorgetownUniversity, Washington, DC.