Mary Lloyd of East Bethel says she was "royally duped" into buying health coverage that wasn't insurance, and she's not alone.
Mary Lloyd's husband was lying in the intensive care unit of an Arizona hospital when she got a good look at their new health insurance card for the first time.
Then she got the shock of her life. The card read: "This is NOT an insurance card."
For the retired couple from East Bethel, it was the beginning of a financial nightmare that left them with at least $50,000 in unpaid medical bills. They discovered that the new "health plan," they signed up for in January, for $499 a month, wouldn't pay for any of his medical care.
"I was royally duped," said Mary Lloyd, a painful admission from a woman who spent 27 years as a clinic and hospital manager. "I understand health care, and I understand health insurance," she said. "That's why I was so mortified that this happened to us."
No one knows how many customers have fallen into this trap. But dubious health plans are "spreading like poison oak all over the country," says James Quiggle of the Coalition Against Insurance Fraud, a nonprofit watchdog in Washington, D.C.
Consumer advocates say companies are taking advantage of the recession and the growing number of uninsured people -- 1 in 5 American adults under age 65 -- to sell "health coverage" that evaporates when customers try to use it, or provides far less than promised.
Just last month, Minnesota Attorney General Lori Swanson sued two out-of-state companies for allegedly misleading customers with phony claims about their health plans; and ten more investigations are underway, she said.
"Here, they're targeting people who are pretty sophisticated, and who really asked all the right questions," Swanson said. People believe them, she said, because they're "so desperate to find affordable coverage."