AHPs Pose Risk of Fraud, Coalition Warns

Small businesses and consumers could be victimized by a wave of fake health coverage if Association Health Plans are authorized under a federal agency that is stretched too thin to properly oversee them, the non-partisan Coalition Against Insurance Fraud warns...
March 13, 2018

Small businesses and consumers could be victimized by a wave of fake health coverage if Association Health Plans (AHPs) are authorized under a federal agency that is stretched too thin to properly oversee them, the non-partisan Coalition Against Insurance Fraud warns.

“On their surface, Association Health Plans are well-intended efforts to help small businesses obtain affordable health coverage. But small businesses and their workers will face a large and intolerable risk of fraud,” the Coalition says in a letter to the U.S. Department of Labor.

The Coalition states: “A wave of fake AHP operators swept through the U.S. in 2002-2004. They sold fake health plans to more than 200,000 policyholders. The cons exploited a federal oversight vacuum. A crime wave also could exploit the oversight gap under the current AHP proposal. An effective, well-developed system of state insurance regulation already is in place. State insurance departments can shut down fake health plans in just days with emergency orders, while the [federal] Labor Department can take years.”


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