“Joe Strohmenger, a self-employed contractor in Rocky Point, N.Y., had never shopped for health insurance before. So last year, when he needed to, he did what a lot of people do: He Googled it,” Zachary R. Mider and Zeke Faux write over at Bloomberg. “The internet search led him to a website that offered free quotes. He typed in his number, and his phone rang immediately. It rang hundreds of times over the next few days as telemarketers vied to reach him. The plan Strohmenger and his wife, Sarah, ended up buying from one of those salesmen sounded like normal health insurance, they say. They got the impression that it covered all the basics, including hospitalization and emergency-room visits. The telemarketer even promised, they say, that it would cover the pricey specialist monitoring Joe’s benign brain tumor. But after paying $8,734 for a year’s coverage, the Strohmengers learned the plan didn’t include those things. In fact, it was so bare-bones that selling it in the U.S. would normally be illegal. Only months later did the Strohmengers learn how the salesman pulled it off. At the time he enrolled them in the health plan, he also signed up Joe for a fake job at a tech company in Georgia. Joe says was never told about the job, never got paid and never did any work. But the bogus relationship opened a loophole that the salesman used to sidestep most insurance laws. Without meaningful coverage, the Strohmengers started avoiding medical care. Joe, who’s 40, skipped visits to the tumor doctor. Sarah, 39, tried and failed to get a refund. When they contacted the New York state insurance regulators, they said they were unable to help. ‘How can someone take this much money from us and no one do anything about it?’ says Sarah Strohmenger, who runs a skin-care boutique near her home on the north shore of Long Island. ‘Why is no one regulating this?’ The Strohmengers are among more than 100,000 U.S. households that have bought plans tied to fake jobs in recent years, data compiled by Bloomberg News show. And their experience echoes complaints from hundreds of consumers across the country, according to a review of government records and interviews with customers, salespeople and regulators. But because the plans are backed by obscure companies with names like Socios Buenos and Vitamin Patch, not by insurance carriers, it’s unclear who, if anyone, has the authority to regulate them.” Zachary R. Mider and Zeke Faux, “Telemarketers are using a weird trick to sell bare-bones health plans,” Bloomberg.
