COMPANIES SELLING SCAM INSURANCE COVERAGE.

U.S. regulators are cracking down on the growing number of companies that fraudulently sell so-called medical discount plans by telling consumers they work like health insurance and cover medical costs.

The Federal Trade Commission said on Wednesday it is working with 24 states to crack down on sellers of medical discount plans that market them as health insurance that covers doctors, hospitals and other services.

Such scams have increased in the wake of the health care reform law passed in March, said David Vladeck, director of the FTC's Bureau of Consumer Protection. The law aims to expand coverage to tens of millions of uninsured and requires people to have health coverage starting in 2014.


The Obama administration is trying to prevent companies from taking advantage of consumers in the wake of the health reform passage, including warning traditional insurers not to use the law as an opportunity to push through big rate increases. .