[Written November 2013]<\/p>\n
Back when I was studying accounting, the Equity Funding scandal was fresh – but the lessons learned from it need to be told to the Obamacare brain trust.<\/p>\n
The scam involved creating fake life insurance policies that didn’t exist. It involved a thing called reinsurance where the company that signs up the client then sells the policy to another insurance company who then collects the premiums and pays out the benefits.<\/p>\n
The finder’s fees were then used to pay the premiums which then fed creating more fake policies. The company grew very fast and was very profitable.<\/p>\n
Equity Funding fell apart when the company that had bought the policies noticed that nobody died and they were not paying out claims. It’s pretty hard to fabricate a death certificate for a person that doesn’t exist.<\/p>\n
If insurance companies can directly sign up people and get a $6-10k “subsidy” payment, it doesn’t take a genius to see that someone might start creating fake people to get the subsidy – and then have a bunch of people that go the entire year without making a claim.<\/p>\n
You know, if the insurance company isn’t “blue”, it could be a “bad apple”<\/p>\n","protected":false},"excerpt":{"rendered":"
[Written November 2013] Back when I was studying accounting, the Equity Funding scandal was fresh – but the lessons learned from it need to be told to the Obamacare brain trust. The scam involved creating fake life insurance policies that … Continue reading