Dozens of people in Massachusetts have been affected by a national health insurance scam, state officials said Thursday.
About 50 Massachusetts residents purchased sham insurance coverage through Simple Health Plans LLC, they said. A judge ordered the Florida company to shut down temporarily last fall after a complaint from the Federal Trade Commission.
Officials at the Massachusetts Health Connector — where individuals can purchase comprehensive insurance plans — said they will allow those affected by the scam to buy new coverage through the Connector, even though the normal enrollment period is closed.
“The unfortunate reality is, there are companies that are trying to scam people into paying for coverage that doesn’t provide effective coverage and leaves victims facing steep bills for care,” said Louis Gutierrez, the Connector’s executive director.
The Federal Trade Commission alleges that Simple Health collected more than $100 million nationally by selling worthless health plans that left tens of thousands of Americans uninsured.
Its complaint argues the company misled people who thought they were buying comprehensive insurance.
Massachusetts residents are required to have health insurance that meets certain minimum requirements, and individuals who don’t comply must pay a penalty.
It wasn’t immediately clear if residents who bought Simple Health coverage would be penalized for having skimpy insurance for part of the year.
Representatives of Simple Health did not comment Thursday.
Separately, the state Division of Insurance last month warned consumers that another company, Aliera, may be operating illegally in Massachusetts. Aliera markets itself as a health care sharing ministry, which allows people with a religious affiliation to share in the costs of members’ health care.
Such plans are exempt from Division of Insurance oversight.
Kevin Beagan, deputy commissioner of the health care access bureau, said the division has not received complaints about Aliera but wants to alert consumers and brokers because the company has faced lawsuits and allegations in other states that it misrepresented itself to members and regulators.
Aliera officials said in a statement that they “will vigorously defend against the false claims directed at our company.”
Beagan said state regulators will stay vigilant and keep following up on tips.
Scams “are always there,” Beagan told the Globe. “All you need to do is go on the Internet and type ‘affordable health care’ and you can see so many questionable practices.”
State officials advise consumers to make sure they are buying plans from licensed insurers and to look out for high-pressure sales tactics and discounts that seem too good to be true.Priyanka Dayal McCluskey can be reached at firstname.lastname@example.org. Follow her on Twitter @priyanka_dayal.