NU Online News Service, April 7, 3:17 p.m. EDT

Enactment of the new health care reform law has spawned fraud schemes by which individuals are seeking to sell bogus policies through 1-800 numbers and by going door-to-door, federal regulators are warning.

Kathleen Sebelius, secretary of the Department of Health and Human Services, Tuesday disclosed that she has sent letters to state insurance regulators and prosecutors about the new schemes.

At the same time, Medical Mutual Insurance Company of Ohio has sent out an alert urging its customers and the public to beware of scammers who may try to sell phony health insurance policies.

"They may try to tell you that, under the reform law, you will need to buy new health insurance," said Brien Shanahan, Medical Mutual's director of legal affairs.

"These pitches may come to you in the form of phony e-mails, fraudulent online ads, door-to-door, or by way of pushy telemarketers," Mr. Shanahan said.

The scams may promise a variety of bogus benefits, Mr. Shanahan said. "They include fake coverage, where you end up making huge payments for a worthless piece of paper with totally worthless benefits."

"Some may even offer enticements such as 'medical discount' cards, which are also worthless," he added.

In her comments and in the letters to state officials, Ms. Sebelius said she has notified the agency's aging networks and put its Senior Medicare Patrol teams on alert.

In addition to their existing responsibilities, she said, the agency's Health Care Fraud Prevention and Enforcement Action Teams "will also vigorously monitor and crack down on new forms of abuse."

In her letters, Ms. Sebelius noted there will be new insurance options in the near future, specifically a high-risk pool for those blocked out of insurance policies due to preexisting conditions and new insurance protections that begin in September.

At the same time, she said, consumers should beware of policies that are time-limited, offer limited benefits, or advertise being necessitated by health insurance reform.

In her letters to regulators and state attorneys general, she said, "I urge you to vigorously monitor and prosecute any individuals who attempt to operate or profit from dishonest scams and take advantage of the new law."

And, she said, "I hope you will act quickly to make investigating and prosecuting these cases one of your top priorities."