Wrongdoers selling phony insurance plans are popping up everywhere. Their less-expensive coverage may look very appealing to Americans who lose coverage at work, experience rapidly escalating premiums, or cannot get coverage elsewhere.

Not only do scammers often lack licenses to sell insurance, they also don’t have sufficient reserves to cover payments. Their game is to pay smaller initial claims to solicit greater premiums from future policyholders. A study found that more than 100,000 scam insurance- plan buyers have been stuck with $85 million in unpaid medical bills since 2001.

Experts offer the following warning signs to look for in potentially counterfeit health-coverage
solicitations:

•Unbelievably low rates.
•No health prescreening requirement.
•Automatic preexisting-condition coverage.
•Promoted and endorsed by individuals allegedly representing labor unions or professional associations.
•Sales pitches that replace “insurance” with “benefits.”

To check a plan’s legitimacy, call our state’s insurance commissioner’s office for licensing, know the agent who will pay claims, and contact an attorney for counsel.