FBI Warns of Rising Discount Medical Insurance Scams Costing Victims Thousands

The FBI has issued a public service announcement alerting Americans to the growing threat of discount medical insurance scams. These schemes promise reduced healthcare costs through what appear to be legitimate insurance plans, but in reality, provide no actual coverage. Victims are often pressured to act quickly under the guise of special offers or time-limited deals, only to discover later that their plans are invalid, with no benefits and no possibility of refunds.

One scam involved a Washington state company operating under multiple business names, which was hit with a cease-and-desist order after receiving more than 100 complaints. Victims reported that promised coverages never materialized and attempts to cancel plans or secure refunds were ignored. In some cases, companies made unauthorized bank withdrawals, leaving consumers with financial losses in addition to unpaid medical expenses.

Victims across the U.S., including individuals in Pennsylvania, Texas, and Maryland, shared similar stories. Many were contacted out of the blue by so-called representatives offering low-cost medical or dental coverage. One individual in Maryland prepaid for a full year of insurance only to find that his local hospital wouldn’t accept the plan, resulting in a $7,000 bill. Others were misled into thinking their existing insurance would be refunded after switching, which never happened.

To avoid falling for these scams, the FBI urges consumers to verify insurance legitimacy through state regulators or the Better Business Bureau. Prospective policyholders should confirm with medical providers that the plan is accepted, avoid high upfront payments, and thoroughly read any documents before signing. Victims are encouraged to report scams to the Internet Crime Complaint Center (IC3) and include as many identifying details about the fraudulent company as possible.