Identity theft experts warn that the already high instances of medical identity theft are set to explode as the launch of healthcare reform begins in October 2013, especially as millions of Americans start looking for insurance options.

They have reasons to worry. Medical identity theft cost $41.3 billion and will affect 1.85 million Americans this year, according to the Ponemon Institute. Many more Americans can expect to become targets as the opportunities for medical identity thieves increase. In 2012, the Federal Trade Commission received over 83,000 fraud complaints regarding "imposter scams," in which identity thieves pose as representatives of government agencies to collect personal information. Officials expect these numbers to grow exponentially once the Affordable Care Act begins to roll-out.

The Threat of Medical Identity Theft and Healthcare Fraud

There is a lot of confusion regarding the Affordable Care Act. Signed into law in 2010, enrollment through the healthcare "exchange" begins on October 1, 2013 for coverage starting January 1, 2014. Consumer confusion about the implementation of the law has allowed identity thieves to get a jumpstart on stealing medical identities using information such as Social Security numbers, medical history, Medicare account information, and other private information.

Gaining access to this information enables identity thieves to fraudulently purchase prescription medications, order medical supplies, receive medical care, and submit false insurance claims—among other forms of healthcare fraud. Although anyone can be a target of medical identity theft, senior citizens, people who don't speak English, and those who have never had insurance coverage or have experienced a lapse in coverage have the highest risk of healthcare fraud.

One of the latest healthcare reform scams and medical identity theft occurs when a scammer contacts someone and tells her she's been selected for early enrollment. The scammer poses as a federal employee and tells her that she must supply her personal and financial information, including bank account data, to receive her insurance card. What most consumers are unaware of is that there are no insurance plans or cards directly associated with the Affordable Care Act. Insurance companies, not the federal government, provide these cards, so beware of anyone who asks for this information.

Preventing Medical Identity Theft

Although some medical identity theft is inevitable with the Affordable Care Act, there are several ways you can protect yourself and limit the chances of becoming a victim of identity theft:

• Be proactive to prevent medical identity theft by signing up for an identity theft protection service such as ID Theft Solutions.
• Government employees do not make house calls, nor will they show up at your door requesting information or selling Affordable Care Act-related healthcare plans. Legitimate federal employees would already have your information on file.
• Don't automatically believe a caller ID screen indicating that a state or federal government agency is calling. Scammers have the latest technology and can display a government agency's name on your caller ID.
• Never provide or verify personal information over the phone, even if the caller claims to be a federal employee. Again, federal agencies already have this information on file, so you will never be called to supply it.
• The government does not send unsolicited emails to request personal information. It only sends correspondence through U.S. mail. You can check the authenticity of a letter by looking up the agency's phone number yourself and calling it for verification.

As healthcare reform goes into effect, the best way to prevent medical identity theft is to stay vigilant, be aware of the warning signs, ask plenty of questions, and never provide your personal information unless it is absolutely necessary.