Oklahoma insurance scam leaves many without coverage

BY VALLERY BROWN Published: December 5, 2009
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More than 100 Oklahomans are struggling to find health coverage after learning an insurance company was taking their premiums with no intention of paying claims.

Bob Harper was days away from getting a pacemaker when he learned his insurance was fake. Joe Smith’s wife, Christy, was undergoing chemotherapy for cancer when he found out the $10,000-per-week treatment would not be covered.

Harper, 62, of Yukon, and Smith, 38, of Sperry, were contacted by the state Insurance Department in November and told their health insurance provider was a fraud — a comingling of at least a dozen companies investigators say are working together as a part of a sham.

Insurance Commissioner Kim Holland said the main company, American Trade Association, sold fake health insurance plans to 116 Oklahoma customers and continually has changed its name and provided fictitious contact information to avoid paying claims.

Investigators say the company sold plans to individuals in at least 20 states. About $14 million in premiums has been paid to the company. This total only represents individuals who’ve alerted authorities that they were scammed, Holland said.

"This is just infuriating,” Holland said.

"There are folks trying to do the right thing, and they are being taken advantage of at a vulnerable time,” she said.

Holland said she thinks the company still is operating under different names and taking more money from unsuspecting people looking for health coverage.

But for Harper and Smith, it isn’t just about the lost money. It’s about taking care of their health and their families.

"This hurts. There is no cure for this,” Harper said.

"These scams are rampant everywhere, but this hits close.”

Harper isn’t yet eligible for Medicare. Because he has pre-existing conditions, the insurance companies he’s contacted either won’t cover him or won’t cover the pre-existing conditions.

And he doesn’t understand how he was duped. Harper said he recently got out of the real estate business and was looking for temporary coverage when a fax came through.

The American Trade Association offer was low and looked like a good deal.



The state Insurance Department encourages all consumers to call and confirm that any company or insurance agent offering insurance or insurance-like products is properly licensed to do business in Oklahoma. They can do this by calling the Oklahoma Insurance Department consumer hot line at (800) 522-0071 or by going to the Web site at www.oid.ok.gov.

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