You may think that the current monthly cost of your health care insurance premiums is staggeringly high. Then you see an announcement, maybe in a spam email, an Internet pop-up or even a sign posted on a telephone pole, which promises that you can save hundreds of dollars each month on your health insurance costs. When you find out and compare the monthly costs between health care insurance and a health discount card, you may think,“This is simply too good to be true!”
And you might be right.
What someone may be attempting to sell you is a “health discount plan” or a “health discount card,” not health care insurance. Further, the vendor may also attempt to confuse you into thinking (by using terms like “premium,” “co-pay” or “deductible”) that what he is offering is a substitute for your current health insurance. But it’s not.
What are the Differences Between Health Insurance and a Health Discount Card?
The idea behind a health discount card is that it can save money on products and services your health insurance may not cover – like dental, vision, hearing, or chiropractic services. Certain insurance companies offer discount cards at little or no cost as an added value to their enrollees. Some associations and employers also provide discount cards.
When you buy a health insurance plan, it generally will cover a broad range of services, and pay you or your healthcare provider for all or a portion of your medical bills.
With a health discount card, you generally pay a monthly fee to get discounts on specific services or products from a list of participating providers. And that is where the benefit of most health discount cards end. That is not to discount the substantial benefit, it is merely to emphasize a discount is not “insurance”.
While some deceptive health discount card issuers may claim that their product is insurance, you will find that discount cards do not pay medical claims. Instead, you would be responsible for paying for medical services at the time your care is received.
Some Things to Consider Before Buying a Health Discount Card
Some discount plans may exaggerate the savings potential and promise discounts that might not be available, with statements like “Discounts up to 75%.” The key words here are up to. Savings with a health discount card are typically a lot less. Again, the benefit of a discount is readily seen, just be sure to know what is included.
Also, how often will you be able to save this much? Discount card rates will likely vary depending on the provider, type of healthcare service, and your geographic area.
Remember that in many cases, since you may also need to pay an enrollment fee and a monthly premium, the end result may be no discount at all!
Additionally, your card may not cover all types of services – especially the specific service or services you may need.
Further, is there a provider in the health discount card network that is able to meet your needs? You may be paying for providers you are not able to or would not choose to use.
Some dishonest card promoters may tell you that particular local doctors participate in the network when they really don’t. Other unscrupulous card issuers may not allow you access to a list of providers until you sign up, or they might send you an inaccurate or outdated list. Check out every claim they make, and get the details of the health discount card in writing before you sign up.
Call your favorite health care providers, as well as others on the plan’s list, before you enroll or pay any fees. Even if your provider is listed in their online directory, double check before you schedule an office visit to make sure that they will accept the card.
Let’s say your medical provider determines that your condition requires a hospital stay. Unlike with health insurance, these expenses are unlikely to be covered through the use of your card, which could cost you thousands or even hundreds of thousands of dollars in medical expenses.
Be sure that the health discount provider has a toll-free number you can call for customer service, a procedure for handling complaints, and a reasonable policy for cancelations and refunds. For instance, one legitimate health discount card provider states: “Our customer care center is staffed with licensed health insurance agents and knowledgeable representatives, ready to assist you.”
Beware: Some Health Discount Card Providers May Not be Trying to Sell You Anything at All!
In fact, they won’t even be sending you a card. Instead these providers may be identity thieves who are using pitches for health discount cards simply to get your personal information. As a result, don’t immediately give out your financial information to someone who spams you with email or cold calls you on the phone.
So What Should You Do?
Ask the salesperson or company if the product is a health insurance plan or a health discount card.
Don’t sign up for a health discount card on the spot. Legitimate plans should be willing to provide you written information and give you the chance to check out their claims before you enroll. If you are pressured to sign up quickly or miss out on a “special deal,” that is a sure signal you should respond with, “No thanks.”
And if you are asked for debit or credit card information or a large up-front fee, run! Legitimate discount cards will not mandate large application fees or up-front costs. Further, legitimate discount card issuers will state on all their marketing material “This is not insurance.” Also, legitimate discount card issuers will never suggest you drop your health insurance, which as you can see, serves an entirely different purpose in the care of your health.
What Else Can You Do?
Unfortunately, because discount cards are not insurance, less protection exists for the buyers. Many state insurance departments do not regulate the companies that sell health discount cards, although some insurance departments have recently enacted legislation to allow for regulation, including licensing or registration requirements.
Your state insurance commissioner’s office can tell you whether a health discount card program — or even a health insurance plan — is licensed in your state, and may be able to alert you to a scam. Find your contact at consumeraction.gov or naic.org.
You can even conduct your own research online by entering the company’s name and the word “scam” or “complaints” into Google or another search engine. The results are likely to show you what others have to say about their experience with the company.
What Should You Do if You Have Been Scammed?
If you’ve been a victim a health discount card scam, report it to the FTC at ftc.gov/complaint.
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Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.
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