With open enrollment in the
Health Insurance Marketplace beginning October 1, 2013, many people who were unable to obtain coverage or seeking other options in health insurance will be able to shop providers, find discounts on coverage, and compare
plans side by side to make choices as to which provider will best suit their needs. Under the Patient Protection and Affordable Care Act (PPACA), commonly referred to as the Affordable Care Act (ACA) or ObamaCare, new rights and protections are available for
individuals seeking lower monthly premiums or out-of-pocket costs for coverage, or free or low-cost healthcare through government programs such as Medicaid and Children’s Health Insurance Program. The Affordable Care Act assures essential health benefits,
including doctor visits, preventive care, hospitalization, prescriptions, lab tests, and more. With so many options available, Business Consumer Alliance advises you to be on the lookout for medical discount plans that may be disguised as health insurance.
Discount medical plans or discount health cards offer lower rates on eligible services through participating network providers. Many of these plans are marketed as health insurance, but beware: discount health cards are not insurance. If you purchase a
health insurance plan, it generally will cover a broad range of services and pay for a portion of your medical bills. With medical discount plans, you are responsible for paying the medical bills yourself. These cards simply offer lower prices to members who
use participating service providers that accept the discounts. These plans should not be viewed as a substitute for insurance.
Some health discount plans are marketing grossly inflated promises about savings and benefits but costing far more than they’re worth. Since discount cards aren’t insurance, there may be fewer consumer protections because your state’s insurance department
may not regulate them, and or require licensing for salespersons who may not need a license or a background in healthcare.
Before making a purchasing decision, keep in mind that discount plans can be sold by anyone, at any cost, and with any benefits. They are not licensed insurance products, even when sold by insurance agents. The protections and rights available to consumers
under health insurance plans may not be available to members of a discount plan.
Here are some tips if you’re considering purchasing a discount plan:
- Know the risks. Signing up for a discount medical plan that you believe will offer a better deal may leave you with no coverage at all. In addition, medical expenses may end up costing much more than if you were insured.
- Beware of promises. Promised discounts made by discount providers may not exist. Also, although plans may claim savings of “up to” a certain percent, a claim of "up to 40%," for example, does not mean a guaranteed 40% savings. There may also be hidden administrative
fees or other undisclosed costs that may leave you paying more than you thought. The medical providers and treatments the cards promise you may not exist, and providers in the discount plan's "network" are often not bound by contract to participate in the
plan. This means that they may stop offering the discount at any time—without notice to plan members—depending on the plan.
- Understand your plan and count your cost. Find out if the plan is considered an insurance product in your state by checking with your
state’s insurance commissioner. Ask about the annual cost of the plan, and get a clear understanding of what the benefits are. Some health discount providers may sell you little more than access to a large
mailing list of medical providers that it purchased commercially. Providers don’t always know they’re even listed and thus may not give you promised discounts. Provider lists could even have outdated and useless names. Don’t assume you’re getting access to
a large provider network just because your discount card displays the network’s name and logo. Be sure to check with your provider(s) as the information given by the plan could be inaccurate, and if they accept the discount card that is being sold to you.
Review plan materials carefully to be certain the benefits are worth the cost. Evaluate the potential savings for the plan versus a health insurance plan and see if the providers will give discounts on your co-payments or the balance of your bill after the
insurance pays its part.
- Be on the watch for scammers and individuals seeking to steal your identity. Avoid providing your credit card and checking account numbers and personal information to strangers selling discount cards over the phone or the Internet. Fees for the card might
be charged to your credit card even if you don’t sign up. You may find yourself battling a mountain of problems that could result from identity theft.
- Don’t forget to:
If you’re a victim of a scam, be sure to
file a complaint.