Health coverage scam puts young at risk

09:46, July 08, 2010      

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Illegal dealers have discovered a new way to scam money by coaxing young people to buy medicine with their medical insurance accounts and sell the drugs to them.

The scheme allows people access to cash from the insurance scheme, while the dealers make profit by selling the medicines to private hospitals.

But Wang Zhan, a local lawyer, warned that the dealers faced up to 10 years in jail for fraud, while the young people involved could be fined for violating medical insurance rules.

An official from the supervision hotline of the Shanghai Food and Drug Administration said they would carry out spot checks regularly around hospitals to crack down on the business.

But he said the high mobility of the dealers had made law enforcement difficult, and they could not punish them until they were caught dealing with their customers.

He urged residents to report the dealers via hotline 962727.

Dealers are often seen walking around hospitals on Caobao Road and Haining Road, advertising their business to passers-by and pasting notices on hospitals' toilet walls.

They target young people because they usually don't need to use their medical insurance accounts as frequently as older people.

The accounts can only be used to cover medical expenses. Holders are not allowed to draw cash from the accounts.

But dealers are persuading young people to buy medicine from small pharmacies where staff are unlikely to check if the medicine is really needed. They can get over-the-counter medicines worth 200 yuan on each visit.

The dealers then buy the medicines at half the original price and sell them on at full price.

An official with the medical insurance supervision hotline advised the young people to think twice before making such illegal deals, as the insurance was also meant to ensure their good health in old age.



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