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Consumer Alert: Beware of Medicare Scam

June 14, 2010

Consumer Alert: Beware of Medicare Scam

For Immediate Release:Monday, June 14, 2010

(ST. PAUL, MN)  The Minnesota Department of Commerce is alerting consumers about potential scams that aim to use the promise of Medicare rebate checks to confuse and defraud the public.

In recent months, federal officials have received reports that seniors are being asked to provide their Social Security numbers in order to receive the "donut hole" checks outlined in the federal 2010 Patient Protection and Affordable Care Act.  The new law provides for a one-time rebate payment of $250 to help seniors on Medicare Part D who enter a gap in prescription drug coverage.  This gap is also known as the "donut hole" for prescription drugs.

While this activity has not been reported in Minnesota, the Department of Commerce wants seniors to understand how the rebate checks work and to be wary of potential scams.

Last year, roughly 63,700 Medicare beneficiaries in Minnesota hit the donut hole, according to the federal government.  Medicare beneficiaries in Minnesota who hit the gap this year will automatically be mailed a one-time $250 rebate check. These checks will begin to be mailed to beneficiaries in mid-June and will be mailed monthly throughout the year as new beneficiaries hit the donut hole.

"Seniors should always be careful about giving out personally-identifiable information to anyone they don't know," said Manny Munson-Regala, Deputy Commissioner with the Minnesota Department of Commerce.  "The Minnesota Department of Commerce regulates the insurance industry.  Consumers should check with us to make sure the agent they are dealing with is licensed."
Additional tips to avoid becoming a victim of fraud include:

  • Beware of door-to-door sales people. Remember, agents cannot solicit business at your home without an appointment. Do not allow uninvited agents into your home.

  • Do not give out personal information, such as Social Security numbers, bank account numbers or credit card numbers to anyone you have not verified as a licensed agent. People are not allowed to request such personal information in their marketing activities and cannot ask for payment over the Internet. They must send you a bill.

  • Verify that the plan you have chosen is an approved Medicare plan. All of the approved plans are available at or by calling 1-800-MEDICARE (1-800-633-4227).

The Minnesota Department of Commerce licenses and regulates insurance carriers and producers in the state.  The department also has the authority to investigate complaints and alleged fraud.  Consumers with questions or concerns about health care insurance products can contact the department at (651) 296-2488 or (800) 657-3602 or e-mail