A lot of attention has been given to various ways that scammers bilk Medicare. But experts are seeing an increase in the number of cases in which the scammers target not just Medicare, but the Medicare recipients themselves. The result is potentially large financial losses for the elderly, who may be ill-equipped to investigate fraud, be embarrassed at having been fooled or by not know where to turn for help in recovering their money.
How does it all work? Frequently, scammers posing as Medicare specialists will ask for bank account or credit card numbers. Once they have them, they can wipe out victims' savings or run up mountains of credit card bills. Similarly, they are sometimes able to use someone's Medicare number as the first step toward identity theft.
"Treat your Medicare number like a credit card. You would not give out credit card information to a stranger. Do not give out your Medicare card (number) to anyone," says Barbara Dieker, director of the Office of Elder Rights at the Administration of Aging, part of the U.S. Department of Health and Human Services.
But the scammers are masters at getting people to reveal personal information. They may call on the phone and chat up the person, saying they are with the federal government. They may ask the victim to verify his or her address, or if he or she still goes to a particular senior center. The goal is to build trust and credibility. Then, they ask for a Medicare number or bank information.
Fueling the fear factorScams run the gamut, but they often play on changes in health care coverage, which the elderly may not understand well or be fearful of, says Dieker. An example is the Patient Protection and Affordable Care Act, the sweeping health reform law passed in 2010.
She says one of the first scams to surface occurred in Missouri, where con artists went to seniors' doors hawking "Obamacare" insurance policies. They claimed the policies had a limited enrollment period, so the person must act quickly. To lock in coverage, the person would have to provide their Medicare number. "People are scared to death to lose health care," Dieker says. "They twist and turn to create misinformation about it to make a buck."
Scammers also used the guise of health care reform to call up a beneficiary, claim to be from the federal government, and offer $250 to help with the prescription drug "doughnut hole." This "doughnut hole" is a coverage gap on prescriptions, when a person's drug costs are too high to be covered by basic Medicare, but not high enough to qualify for catastrophic coverage.
The catch: Scammers tell seniors they must provide their bank account number to receive a direct deposit, or their Medicare number.