Disability Insurance Claims in California Have Been Placed on Hold Because They Appear Suspicious

Approximately 345,000 disability insurance claims in California have been halted by the state’s labor department, which believes the claims are tied to dishonest individuals attempting to exploit the system.

It was announced on January 13 by the state’s Employment Development Department (EDD) that it suspected “organized criminal elements” of filing fake claims using stolen credentials from doctors and other medical professionals. Department of Health and Human Services froze 27,000 suspected medical provider registers, along with 345,000 claims related with those providers or other suspicious behavior.

The EDD is requesting that medical providers submit identification forms in order to verify their identity as the state tries to unfreeze accounts that are legitimate.

Despite the fact that the vast majority of these providers and claims were most likely fraudulent attempts, the Department has collaborated with state regulators and medical provider organizations to coordinate the verification process in order to clear any legitimate claims as quickly as possible, according to a Department press release. “This is the number one priority for EDD.”

After being hit by the epidemic, many states discovered that they were vulnerable to fraudulent claims for insurance benefits that had been provided by the state and federal governments to aid people who had been infected with the new coronavirus. According to the Los Angeles Times, California has suffered a $20 billion loss as a result of bogus claims.

Due to fraud concerns, California is still in the process of unfreezing 1.4 million Pandemic Unemployment Assistance claims that were frozen in the wake of the pandemic. According to the most recent update on Jan. 13, one in every five residents has refiled claims for PUA, with 90 percent of those claims being cleared by the state so far this year.

Americans who are afflicted by a disability can benefit from disability insurance. Some people who rely on those benefits say they will suffer until the claims that have been halted are reprocessed properly.

Theresa Holt informed the local television station, Fox KTVU, that she was “mad” because she had just experienced medical concerns and was unable to receive disability insurance.

“I’m trapped in this loophole that they’ve made for themselves. It is, in my opinion, inappropriate “ she explained.

However, given the huge number of bogus claims and the amount of money taken in California, some are beginning to wonder how fraud has become so easy to do.

According to the Los Angeles Times, Sen. Richard Pan, a pediatrician who represents Sacramento in the California State Congress, anybody can readily dig up people’s identities on the internet.

As he explained, “I believe it is a statement on the issue of privacy on the internet, as well as the possibility it provides those who want to defraud and try to take over other people’s identities.”


Scroll to Top