Medical Discount Plans

These aren't health insurance:

Medical discount plans

Health discount plans

Discount health cards

Discount medical cards

Medical discount plans/cards are not health insurance

Medical discount plans can help you save money on out-of-pocket costs by giving you access, for a fee, to list of health care providers who have agreed to offer their services at a discounted rate. But unlike true health insurance, these plans do not actually pay medical claims. You'll still have to pay the entire bill yourself.

Before you purchase a medical discount plan:

·         Read the fine print carefully

·         Ask to see a list of discount providers - if the company refuses, walk away

·         Verify that the company has a web site and toll-free customer service number

·         Research consumer complaints against the company with your state department of insurance and/or Better Business Bureau

·         Resist any high-pressure sales tactics, particularly deadlines and limited-time offers

·         Investigate claims that seem exaggerated (in the words of the National Association of Insurance Commissioners, "If it looks too good to be true, it probably is.")

·         Do the math: will the potential savings justify the fee?

With health care costs rising everywhere and insurance premiums following apace, more and more consumers have begun to take a closer look at medical discount cards. For the insured, they hold the promise of reduced costs, and for the uninsured, particularly those who can't get coverage or can't afford it, such plans amount to 'the next best thing.'

Honest sellers of medical discount plans are forthright about the fact that they're not selling actual insurance. Many will come right out a say, "This is NOT health insurance." (In fact, that could be a useful test of the trustworthiness of a medical discount plan provider-if the company isn't honest about what it is and isn't selling, keep moving, but if they are, give them a second look.)

Throughout the years, many financially pinched consumers have been deceived-often with exaggerated marketing hype, obscure fine print and calculated omission-into thinking that what they were buying was health insurance. Some even bought medical discount plans that proved to be entirely worthless, nothing more than an elaborate scam.

Until recently, the market for medical discount plans was like the Wild West-lawless and filled with snake-oil salesmen preying on unsuspecting consumers. While this unruly scene has improved in the last few years, with many state legislatures enacting consumer protections and weeding out unscrupulous providers, there are still many fraudulent and deceptive actors out there, and each year thousands of American consumers report having been sold  the equivalent of a bag of wooden nickels.

What's more, until states play regulatory catch up, many consumers will find they have no recourse if they are bilked by misleading discount-plan sellers. (Real health insurance, on the other hand, is regulated by each state and sold under a rigorous system of consumer protection.) More and more states, we're happy to report, are stepping up their oversight, putting tough restrictions on sellers of medical discount plans and giving fleeced consumers a better shot at compensation. In April 2008, Texas, which has the largest population of uninsured in the nation and is thus particularly attractive to unscrupulous companies, instituted a licenses scheme for discount plan providers.

But there is still room for improvement, and the industry has a long time before it can regain the trust of consumers. Until then, caveat emptor. A medical discount plan-aka health discount plan, health discount card, etc.-can be a helpful weapon in combating high health care costs, but the wrong plan will simply add to your overall tab.

Slow down, read the fine print, ask important questions and you'll be in good shape.

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Don't believe the hype    (Believe the fine print)

The U.S. Federal Trade Commission  has identified some common marketing tactics used by sellers of discount plans. Here are a few oftheir more deceptive phrases:

·   Affordable health care plan

·   Pre-existing conditions? No problem!

·   No deductible or co-pays

·   Thousands of providers in our PPO network

·   Discounts up to 60%

Context can be another red flag: the Texas Department of Insurance advises extreme caution when offers come unsolicited via telephone, mail or email

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