The FTC Is Warning Medicare Recipients About a Threat Hiding in Plain Sight

Medicare may help millions of seniors save money in retirement while getting the healthcare they need, and the Open Enrollment period gives them an opportunity to compare and switch Medicare plans. But the Federal Trade Commission (FTC) is warning that Open Enrollment might bring extra risks for retirees who could fall victim to scams and deceptive marketing. Such scams increase during Open Enrollment, and it's important for seniors to be aware of these risks.

Here's what you need to know about common Medicare scams and how to protect yourself during Open Enrollment.

The FTC warning about Medicare scams

In late September, the FTC posted a consumer alert warning of the scams that are prevalent during Open Enrollment. According to the alert, scammers may pay to appear at the top of online search results so that when seniors search for a new plan, they see the scammers' results first.

The scam websites often feature addresses that are similar to government websites. They may use keywords and have official-looking logos to trick seniors into thinking that they're looking at real government websites, like Healthcare.gov or Medicare.gov. However, the websites sell scam plans that aren't actual health insurance, or they might capture a senior's personal information as part of a medical identity theft scam.

The first result in search engine traffic isn't necessarily official, since paid ads appear above organic search results, which makes it even easier to mistake a scam site for a genuine one. Traffic to these scam sites spikes during Open Enrollment, which lasts from October 15 to December 7.

Medicare phone scams

In addition to the search result scams, some Medicare scams involve calling Medicare enrollees directly in an attempt to gain their personal information. For example, some callers claim that Medicare is issuing updated cards and ask the enrollee to confirm their Medicare number or banking details to get their new card.

Other callers offer free genetic testing or equipment and request an enrollee's Medicare number to process the request. The scammer then bills the program for the items, and the beneficiary might be responsible for the full cost of the equipment if Medicare denies the claim.

Some callers tell enrollees that their coverage may be suspended unless they verify their Social Security number by phone.

The risks of medical identity theft

These Medicare scams may be an attempt at medical identity theft. Medical identity theft occurs when someone steals personal information to get medical care, buy prescription medications, submit insurance claims, or otherwise use the victim's insurance information for health purposes. A scammer might try to steal information like the victim's name, Social Security number, health insurance account number, or Medicare number.

Medical identity theft could have significant consequences for the victim. It could affect their ability to get medical care or use their health insurance benefits. It might also impact their credit score.

The red flags to watch for

There are several red flags that might signal you're dealing with a scammer. Unsolicited calls from Medicare are the first red flag. Medicare only asks you to verify your personal details if you've initiated the contact.

Many of these scams leverage fear and create a sense of urgency in an attempt to get you to share your personal information before you have a chance to consider whether the request is valid. If a caller is pressuring you for information or saying that you need to act immediately, you're likely dealing with a scammer. Any caller who requests your personal information before they identify themselves is also suspect.

Look out for fake or misleading plans, too. Always take your time to fully review a plan before signing up.

Protecting yourself against Medicare scams

To protect yourself against Medicare scams, be extra careful when you're comparing plans online. Look for an "Ad" or "Sponsored" label next to website search results. Check each website address for a .gov ending to make sure you're using an official government site and are accessing trustworthy information. Start your search with Medicare.gov or call 1-800-MEDICARE.

Your State Health Insurance Assistance Program also offers free Medicare help.

Bottom line

Medicare scams are common, so stay aware of the risks, particularly during Open Enrollment. If you suspect fraud, report it to the FTC at ReportFraud.ftc.gov. If you've already shared your Medicare number in a suspected scam, report the issue to the FTC. You should also call 800-633-4227 to report the issue to Medicare and learn about the next steps you should take.

Most importantly, take your time as you shop for a Medicare plan during Open Enrollment. Carefully comparing plans, verifying that you're buying insurance from a reputable source, and ensuring that you choose the best plan for your budget and needs are all important steps in avoiding potential financial mistakes during retirement.

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