Medical identity theft is a growing concern that can have devastating consequences for individuals. From emotional distress to financial ruin, victims face a multitude of challenges when their personal health information falls into the wrong hands. In this article, we will delve into the impact, causes, costs, scams, detection, and prevention of medical identity theft. By understanding the risks and arming ourselves with knowledge and preventive measures, we can safeguard our well-being and financial stability.
1. The Impact of Medical Identity Theft on Victims
Medical identity theft can have devastating consequences for individuals who fall victim to this crime. Not only does it cause emotional distress, but it can also have severe financial and physical impacts. Real-life stories and statistics highlight the severity of the issue.
Emotionally, victims of medical identity theft often experience feelings of violation, helplessness, and fear. Discovering that someone has stolen their personal health information and used it for fraudulent purposes can be a traumatic experience. It erodes trust in the healthcare system and leaves individuals feeling vulnerable.
Financially, the cost of medical identity theft can be astronomical. Victims may face unexpected bills for medical treatments they never received, leading to financial strain and potential bankruptcy. According to data from 2017, almost two-thirds of victims reported losing an average of $13,500 to fraudulent bills. Healthcare had the highest cost per stolen record at $429.
Physically, medical identity theft can result in delayed or incorrect medical care. Fraudulent treatments done under a victim’s name can lead to misdiagnosis or unnecessary procedures, putting their health at risk. Additionally, victims may lose access to their health benefits as criminals exhaust their coverage limits.
One real-life example is the case of Juan Seoane, an 84-year-old man who was found on the brink of death due to medical identity theft. Scammers had used his stolen information to commit Medicare fraud while he suffered in squalor. This heartbreaking story highlights the life-threatening consequences that victims can face.
To address this issue, individuals should take proactive steps to safeguard their health insurance cards and personal health information. They should also monitor their medical records and bills closely for any signs of fraudulent activity. By staying vigilant and seeking immediate action if they suspect they have become victims of medical identity theft, individuals can protect themselves from the devastating impacts of this crime.
2. How Medical Identity Theft Happens
Medical identity theft can occur through various methods used by scammers to obtain personal health information. One common tactic is phishing scams, where individuals are tricked into providing their sensitive information through fraudulent emails or websites. These scams often appear legitimate and may even mimic official healthcare organizations or insurance providers. To protect themselves from falling victim to phishing scams, individuals should be cautious of any unsolicited requests for personal information and should verify the legitimacy of any emails or websites before providing any sensitive data.
Data breaches are another major source of stolen personal health information. Criminals target healthcare organizations and insurance companies to gain access to large databases containing valuable medical records. These breaches can result from inadequate security measures or sophisticated hacking techniques. To protect themselves from data breaches, individuals should regularly monitor their credit reports and be vigilant for any signs of unauthorized activity. They should also ensure that they are using strong, unique passwords for their online accounts and consider enabling two-factor authentication for an added layer of security.
3. The Cost of Medical Identity Theft
Medical identity theft not only has emotional and physical impacts on victims, but it can also have severe financial consequences. The financial implications of medical identity theft can be overwhelming for individuals who fall victim to this crime. One of the most significant financial impacts is the occurrence of fraudulent bills. Victims may receive unexpected bills for medical treatments they never received, leading to financial strain and potential bankruptcy. These fraudulent bills can range from a few hundred dollars to thousands of dollars, depending on the extent of the scam.
In addition to fraudulent bills, victims of medical identity theft may also experience a loss of benefits. Once criminals gain access to a victim’s medical benefits, they can exhaust the coverage limits, leaving the victim without access to necessary healthcare services. This loss of benefits can be particularly devastating for individuals with chronic illnesses or those in need of urgent medical care.
Furthermore, victims may incur legal fees as they try to resolve the aftermath of medical identity theft. They may need to hire lawyers to dispute fraudulent charges, correct their medical records, and navigate the complex process of recovering their identities. These legal fees can add up quickly and further exacerbate the financial burden on victims.
Another long-term impact of medical identity theft is its effect on victims’ credit scores and financial stability. If fraudulent bills go unpaid or if victims are unable to cover the costs associated with resolving the identity theft, their credit scores may suffer. This can make it difficult for them to secure loans, obtain affordable insurance rates, or even find employment. The financial repercussions of medical identity theft can linger for years and significantly impact victims’ overall financial well-being.
4. Common Scams Associated with Medical Identity Theft
Medical identity theft can give rise to various types of scams that can have severe consequences for victims. One common scam is false representation, where an identity thief pretends to be the victim in order to receive medical treatments. This can result in the victim receiving unexpected bills for services they never received, causing financial strain and potential bankruptcy. For example, June Smith had her Medicare billed for almost $50,000 for medical treatments she never received.
Illegitimate insurance claims are another type of scam associated with medical identity theft. Scammers use stolen health insurance information to submit fraudulent claims, resulting in financial loss for both the victim and the insurance company. In some cases, criminals may even run illegitimate medical insurance scams through healthcare agencies, leading to significant payouts on fraudulent claims. For instance, a California doctor was indicted after running such scams through multiple home health agencies, resulting in over $6 million in fraudulent claims.
5. Detecting Medical Identity Theft
It is crucial for individuals to be aware of the warning signs that may indicate they are victims of medical identity theft. Recognizing these signs early on can help individuals take immediate action to protect themselves and mitigate the potential damages. Some common warning signs of medical identity theft include:
- Receiving unexpected bills from medical providers for services that you have never received. Pay close attention to any medical bills in your name or your dependents’ names, especially for treatments or procedures you are unfamiliar with.
- Receiving calls from debt collectors for medical debts that you do not recognize. If you receive calls about unpaid medical bills that you are unaware of, it could be a sign that someone has used your identity for fraudulent purposes.
- Noticing mistakes or unexpected entries in your medical records, such as incorrect addresses or dates of birth. Look out for any fraudulent entries, such as treatments or medications that you did not receive or authorize.
- Receiving a change of address confirmation from your medical insurance provider, even though you have not moved. This could indicate that someone has changed your address in order to intercept important communications regarding your healthcare.
- Your health insurance provider notifying you that you have reached your benefits limit, despite not making many (or any) claims. If you receive this notification and suspect it is incorrect, it could be a sign that someone has been using your insurance benefits fraudulently.
If you notice any of these warning signs, it is important to take immediate action to protect yourself from further harm. Here are some steps you can take if you suspect you are a victim of medical identity theft:
- Contact your healthcare provider and health insurance company: Inform them of the suspected identity theft and ask for assistance in resolving the issue. They can help you review your medical records, correct any errors, and ensure that future fraudulent activity is prevented.
- File a report with the Federal Trade Commission (FTC): The FTC is responsible for handling identity theft cases. By filing a report with them, you can provide valuable information that may aid in their investigations and help prevent others from falling victim to the same scam.
- Monitor your credit reports: Check your credit reports regularly to look for any unauthorized accounts or suspicious activity. You can request free credit reports from each of the three major credit bureaus once a year. If you notice any discrepancies, report them immediately.
- Consider placing a fraud alert or credit freeze: A fraud alert notifies potential creditors that you may be a victim of identity theft, prompting them to take extra precautions before approving new accounts in your name. A credit freeze restricts access to your credit reports, making it more difficult for identity thieves to open new accounts using your information.
- Keep records of all communication and documentation: Document all interactions with healthcare providers, insurance companies, law enforcement agencies, and credit bureaus. Keep copies of any correspondence or documents related to the identity theft case as evidence.
By being vigilant and taking prompt action if you suspect medical identity theft, you can minimize the potential damages and protect yourself from further harm. Remember to regularly monitor your medical records, bills, and credit reports to detect any signs of fraudulent activity early on.
6. Preventing Medical Identity Theft
Preventing medical identity theft is crucial in safeguarding personal health information and protecting yourself and your family from the devastating consequences of this crime. Here are some practical tips and strategies to help prevent medical identity theft:
- Safeguard your health insurance cards: Treat your health insurance cards and Medicare cards as you would a credit card or Social Security number. Keep them in a safe place and only provide them when necessary. If you lose your cards, contact your health insurance company immediately to report the loss and request new cards.
- Monitor your medical records: Regularly review your medical records for any errors or fraudulent entries. Look out for incorrect addresses, dates of birth, or unfamiliar treatments or medications. If you notice any discrepancies, notify your healthcare provider immediately and request that they correct the errors.
- Review bills and notices carefully: Take the time to carefully review all bills, Explanation of Benefits (EOB), and other notices related to your medical care. Look for any unexpected charges or services that you did not receive. If you spot any suspicious activity, contact your healthcare provider and insurance company to report the issue.
- Set up fraud alerts or credit freezes: Consider placing a fraud alert on your credit reports to notify potential creditors that you may be a victim of identity theft. This can help prevent unauthorized accounts from being opened in your name. Alternatively, you can initiate a credit freeze, which restricts access to your credit reports, making it more difficult for identity thieves to use your information to open new accounts.
- Consider a family identity theft monitoring plan: Protecting vulnerable family members is essential in preventing medical identity theft. Consider signing up for a family identity theft monitoring plan, like the one offered by Aura, which can monitor and alert you if someone is trying to use your family’s sensitive information for fraudulent purposes. This added layer of protection can help ensure the safety and security of your entire family.
By following these preventive measures and staying vigilant, you can significantly reduce the risk of becoming a victim of medical identity theft. Remember to stay informed about the latest scams and security practices, and regularly update your passwords and security settings for online accounts. Taking proactive steps to protect your personal health information is essential in safeguarding your identity and ensuring your peace of mind.