A Plague of Health-Insurance Scams

In June, 2000, Lisa and Dennis Huffstutler were thrilled with their new health insurer, Vanguard Asset Group. Its plan, sold via a trade organization Dennis belonged to, was cheaper than their expiring Blue Cross Blue Shield of Florida HMO policy--$4,800 a year, vs. $5,064. They could choose their doctors. And it covered existing conditions--a big plus since Lisa and their 4-year-old son have chronic medical problems.

A year later, their view changed drastically. Hospitals and doctors were dunning them for $15,000 in unpaid claims. Contacting Vanguard -- which has no connection to the mutual-fund family -- did no good. "They would say things like, 'The doctors used the wrong code' or 'The check is in the mail,'" recalls Lisa, who was pregnant again. She began to fear that her obstetrician would drop her.