Unlicensed companies selling sham health insurance policies to individuals and small businesses are proliferating, leaving millions of dollars in unpaid claims, the General Accounting Office said in a new report. State and federal officials identified 144 companies, covering some 15,000 employers and more than 200,000 policyholders, that were marketing health coverage they were not authorized to sell, according to a 2003 survey. The bogus insurers left at least $252 million in unpaid medical claims; only 21% had been recovered at the time of the GAO survey. The study found five or more bogus insurers in every state, topping out at 31 in Texas. Insurance regulators in 30 states had issued 108 cease-and-desist orders to stop the marketing of health coverage by 41 of the 144 unlicensed companies, the report said. The Labor Department had obtained court orders against three companies with $39 million in unpaid claims. At deadline, the report was not available on the GAO Web site. -- by Laura B. Benko
Bogus health insurers popping up all over: GAO
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