Discount Plan or Health Insurance?
Looking for health insurance? Make sure that’s what you’re buying, or you could find yourself on the hook for big medical bills with no way to pay them.
Dishonest marketers make it sound like they’re selling affordable health insurance, when really, it’s a medical discount plan instead. Medical discount plans can be a way for some people to save money on their health care costs, but discount plans aren’t health insurance, and aren’t a substitute for it.
If you buy a health insurance plan, it generally covers a broad range of services, and pays you or your health care provider for a portion of your medical bills.
With a medical discount plan, you generally pay a monthly fee to get discounts on specific services or products from a list of participating providers. Medical discount plans don’t pay your health care costs.
While there are medical discount plans that provide legitimate discounts, others take people’s money and offer very little in return. Dishonest marketers sometimes make it sound like they’re selling you health insurance, or lie about what their plans really offer. Here are some ways to ensure you don’t get caught up in a discount scam:
Beware of “Up To” Discounts
“Discounts of up to 70%!” — but how often will you save that much? Savings with discount plans typically are a lot less. When you consider a discount plan’s monthly premiums and enrollment fees, there may be no “discount” at all. What’s more, if you have major health problems or an emergency, you will have to cover most, or all, of the bills if you don’t have health insurance.
Confirm the Details
Medical discount plans aren’t a substitute for health insurance. Nevertheless, if you are interested in a discount plan, check whether the doctors you use participate. Call your providers, as well as others on the plan’s list, before you enroll or pay any fees. Some dishonest plan promoters may tell you that particular local doctors participate when they don’t, or they might send you outdated lists. Check out every claim, and get the details of the discount plan in writing before you sign up.
Don’t Sign Up on the Spot
Legitimate plans should be willing to point you to written information and give you the chance to check out their claims before you enroll. Pressure to sign up quickly or miss out on a “special deal” is your cue to say, “no thanks.”
Some Pitches Are After Your Information
Unfortunately, identity thieves also use pitches for medical discount plans and insurance to get your personal information. Don’t give out your financial information to someone who calls you out of the blue, or whose reputation you haven’t checked out. You can do that with your state insurance department, your state Attorney General, your local Better Business Bureau, and even by entering the company’s name and the word “complaints” or “scam” in an online search engine to see what others have to say.
The idea behind medical discount plans — also known as discount health care programs — is that you will save money on products and services your insurance may not cover like dental, vision, hearing, or chiropractic services. Some people automatically get discount programs through their health insurance company.
Many states require medical discount programs to be licensed or registered. Your state insurance commissioner’s office can tell you whether a medical discount program — or a health insurance plan — is licensed in your state, and may be able to alert you to a scam. Find your contact at naic.org or consumeraction.gov.
If you’ve been targeted by a medical discount scam, report it to the FTC at ftc.gov/complaint.