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Cost of Fraud

Insurance fraud can take many forms. It includes worker's compensation fraud, unemployment and disability insurance fraud, automobile insurance fraud, homeowner insurance fraud, and health insurance fraud.

Sometimes, fraud is easily uncovered. Other fraudulent conduct is difficult to discern and requires greater investigation.

Health insurance fraud is a major driver of health care costs in the United States. It is estimated that 3 percent to 10 percent of total health care expenditures are related to insurance fraud.1 But it is difficult to quantify the precise cost attributable to health care fraud.

The Coalition Against Insurance Fraud estimates that insurance fraud costs $80 billion per year. Other estimates place an even higher value of $100 billion per year attributable to fraud.2 Regardless of the precise amount, there is little doubt that insurance fraud is costly to insurers, health plans, the health insurance system, and to consumers. To illustrate the point, please follow the link: to see what $80 billion can purchase.3

There is a nationwide effort to educate the public about insurance fraud and the cost associated with it. In New Jersey, the Office of the Insurance Fraud Prosecutor and the Bureau of Fraud Deterrence lead the way to educate the public about insurance fraud. In Connecticut, the Fraud and Investigations Unit of the Connecticut Insurance Department is similarly charged with pursuing fraud. Nationally, the Federal Bureau of Investigation and many state law enforcement agencies aim to educate the public.

Keep the following in mind:

FBI statistics, Financial Crimes Report To The Public, Fiscal Year 2007, as reported on article, "Health Care Fraud Costs Taxpayers Three Times as Much as Medical Malpractice," November 30, 2009.

2CNN Money article, by Parija Kavilanz, January 13, 2010.

3Coalition Against Insurance Fraud, "How much is $80,000,000."

4Texas Department of Insurance website, Frequently Asked Questions

Contact Us

Fraud hotline: 888-696-3262
Fax: 973-944-4573

Write to:
Delta Dental of New Jersey, Inc.
Special Investigations Unit
1639 Route 10
Parsippany, NJ 07054