Blog , Finance

Anatomy of a Scam: Medicare

Posted on Monday, April 1, 2024
by Outside Contributor
An elderly female hand holds a mock United State government Medicare Health Insurance card. It is a generic card. This is a photo illustration.

Sponsored By – Travelers

Medicare scams are commonly used by fraudsters to gain access to sensitive personal information in order to steal money. For older Americans, these scams often involve fraudsters impersonating Medicare representatives.

How Medicare Scams Work

As of March 2023, more than 65 million Americans were enrolled in Medicare [1]. This provides a rich environment where scammers can perpetrate various frauds. Typically, the scammer’s goal is to trick people into handing over personally identifiable information (PII) which can then be used to gain access to the victims’ accounts. The PII can include:

  • Credit card numbers
  • Bank account numbers
  • Medicare number
  • Social Security number
  • Personal information
  • Health information

Medicare fraud can start with a phone call, text or email [2]. For example, the fraudster may first call their target and impersonate a government representative. Often, the scammer says they’re calling from the Medicare office [2]. Then they perpetrate one of several schemes to elicit information from the victim [2].

  • Refund scams. Scammers may call and say the victim has overpaid their premiums and is owed a refund. Or, they may say the target of the fraud underpaid and owes money to the government, which can be paid directly over the phone. Both scenarios require the victim to provide personal, financial information and/or direct payment.
  • Free equipment scams. Fraudsters may tell a Medicare enrollee that they’ve qualified for “free” medical equipment. The victim is further misled into giving their Medicare or Social Security number to “verify” their eligibility.
  • New card scams. Scammers could also lie and say Medicare is issuing the victim a new card, and that they must give personal information to verify it.

Of course, once a scammer has your personal and financial information, they can access your finances, run up charges on a credit card and/or impersonate you. According to the latest FBI Elder Fraud Report, losses from government impersonation fraud in 2022 exceeded $136 million. This was nearly twice the amount reported in 2021 [3][4].

Understanding Medicare Fraud

One way to illustrate a common Medicare scam is through the sample story of William Garcia. Although William is not a real person, this type of scenario is a realistic portrayal of what can happen.

William retired recently and enjoys spending time with family, especially his grandchildren. Like many retirees over 65, William has Medicare to help cover his healthcare needs.

He’s always been careful about protecting his personal information. So, he was suspicious when he picked up a phone call from an unknown number. The caller claimed he was a government employee working for Medicare.

Since the scammer had William’s name and phone number, and caller ID stated it was an official Medicare phone number, it seemed legitimate. And the fraudster himself was convincing, telling William that Medicare discovered he was overpaying his premiums, and he was eligible for a refund.

The scammer promised that William would see the refund in his bank account within ten business days. William had to give his name, Medicare number and bank account for confirmation to receive the funds. He complied and shared his personal information.

A few days later, he checked his bank account to see if the refund had gone through. He quickly realized something was wrong. Two thousand dollars were gone.

Neither William nor his wife made any recent large purchases nor transferred money between accounts. After calling his bank, William realized he was the victim of Medicare fraud.

How to Help Prevent Medicare Scams

Medicare fraud is common and anyone who is qualified or enrolled can be a target. A scammer just needs access to a list of phone numbers and other personal information such as a name. Claiming they’re in an official government role helps gain their victim’s trust, especially when fraudsters have the ability to display an official government phone number on caller ID [5].

The good news is, it’s possible to spot these scams before they result in a loss. Here are a few tips to help prevent you and your loved ones from falling victim to a Medicare fraud:

  • Don’t answer calls from unknown numbers. Scammers use a tactic called “spoofing.” It’s a way to disguise where a call is coming from on your caller ID. For example, they can make their call from anywhere but display a government agency with a Washington, D.C., area code (202), as in William’s scenario [5].
  • Don’t give information to anyone who says they’re calling from Medicare unless you called them first. A Medicare representative will only call if you’ve contacted them directly (e.g., when you enrolled in a Medicare plan) and a call back is required [6].
  • Don’t tell anyone your Social Security or Medicare number. Only your doctor, medical professional or Medicare customer service representative should have this information. Consider these numbers as private as your bank account or credit card numbers.

If someone calls saying they’re from Medicare:

  • Hang up if you’re unsure. Contact 1-800-MEDICARE to speak to an official customer service representative and confirm the information [6].
  • Know the facts. Don’t believe anyone who says the Social Security number on your Medicare card is wrong or missing. Between 2018 and 2019, Medicare gave all enrollees new cards with more secure Medicare numbers, replacing Social Security numbers. And there’s no reason you’d need a new card unless yours is lost or damaged and you requested a replacement. If you have a Medicare plan through a private health insurance company, like Medicare Advantage, the private plan will issue you a separate card for health services [7][8].
  • Educate yourself. The Consumer Financial Protection Bureau has a variety of tips and tools to help keep you and your loved ones from being scammed [9].

Outsmart the Fraudsters

Falling victim to a Medicare con is stressful and may cause significant financial loss. While today’s scammers are savvy, you can improve your chances of outsmarting them by taking precautions, maintaining a healthy skepticism and knowing how to spot the red flags.

This content is brought to you by Travelers. AMAC members receive special discounts and competitive rates on auto and home insurance from Travelers.

To learn more about how you can save on Home, Renters and Auto Insurance, visit this Travelers website or call 866-675-9167.

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Ben Ray
Ben Ray
1 month ago

Good advice, but I will take it a step further. ANY calls, text messages or emails from any kind of business or vendor you deal with needs to be handled with the thought there may be fraud. For example, medical, banks, credit cards, utilities… anybody you do business with.
If you are contacted, do not provide any information to them or respond to emails or text messages. Get an official phone contact from any of their billing statements (I still get paper bills) or lookup their official customer service website. Then you contact them. Explain what you were told and ask them to verify if there really is an issue.

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