Last year, the Justice Department brought the largest healthcare fraud case in its history, which included charges that criminals stole the identities of more than 1 million Americans to submit $10.6 billion in fraudulent Medicare claims for urinary catheters. While Medicare blocked nearly all of it, private Medicare supplemental insurers paid out about $900 million.
Americans lost a record $20.9 billion to internet crime in 2025, up 26% in one year, according to the FBI. Insurance fraud, including healthcare fraud, costs Americans more than $300 billion a year, and health insurance scams pick up during open enrollment, the FTC says.
Seniors are the hardest-hit age group, losing $7.7 billion in 2025, up 59% in one year. In fact, Michigan officials warned on Oct. 12 of impostors claiming to be from Medicare to dupe older adults.
As co-founder of Spokeo, a people search company, and former co-chair of the W3C Credentials Community Group, I have witnessed firsthand how scammers have grown increasingly sophisticated over the last 20 years.
Insurance scams are evolving and costly
We are seeing many insurance-related scams in 2026. Fraudsters are buying sponsored search ads with web addresses and logos that look very similar to HealthCare.gov and Medicare.gov. When Americans click on the link, they end up buying a plan that is not real insurance and also fork over their personal information, which can lead to identity theft.
Even large health insurers are being duped, as the $900 million loss in the catheter case shows.
The Coalition Against Insurance Fraud calls insurance fraud "the crime we all pay for," because it comes back to honest policyholders as higher premiums, which can hurt retention.
In a September survey by BrandShield, 30% of U.S. adults said they would stop buying online from brands scammers had impersonated. For an insurer, that is a renewal lost to a scam it never ran.
Here are three tips for insurers to help prevent insurance fraud
- Say what you will never do. Tell customers you will never ask for a one-time code or take payment by gift card, wire or crypto. Put the statement on the ID card, in the app, and on every renewal notice.
- Explain what numbers to trust and verify. Scammers can spoof caller ID so your company's name appears on a customer's phone. In every fraud alert, encourage customers to use the number on their card and check the identity of incoming callers with a reverse phone search.
- Report fake ads and websites and warn consumers. Search regularly for impostors using your name and report them to the FBI IC3, the FTC, and the online platform where they live. Send alerts to customers in real time.
