The Better Business Bureau is cautioning consumers about "discount cards" that are marketed as if they are health insurance plans. Given the confusion over the Affordable Care Act, advertisements for discount plans are appearing everywhere – on telephone poles, in elevators, on unsolicited faxes and in spam e-mails. They all boast low monthly rates and provide a contact number for information. Unfortunately, if additional details are provided, they do not always tell the full story.
Judging by complaints received by BBBs, many consumers mistakenly believe that by signing up for a discount medical plan, they have purchased affordable health insurance. In fact, discount plans vary significantly from actual insurance and provide different benefits. For instance:
- Discount plans can be sold by anyone at any cost with any benefits. They are not licensed insurance products.
- Health insurance typically covers most or the entire bill for approved services (after deductible, coinsurance and/or co-payments have been paid). By comparison, a discount plan provides only a discount off of a participating health care provider’s full fee; the patient is responsible for paying a majority of the fee at the time of the office visit.
- The protections and rights available to you under a health insurance plan may not be available to members of a discount plan.
- Providers in a typical discount plan’s "network" are not bound by contract to participate in the plan and may stop offering the discount at any time.
- Your contact information and privacy may not be protected and even sold to other marketers.
If you are considering enrolling in a discount health plan, review the plan carefully. Ask the following questions before making a decision, and obtain the answers in writing!
- Is this plan an insurance product in my state? Verify the answer by contacting your state insurance department.
- What is the annual cost of the plan? Don’t be swayed by exaggerated savings claims. "Up to 40%" does not mean a guaranteed 40% savings!
- What are the benefits of the discount? What health products and services are covered; which ones are not covered?
- Which local health care providers and facilities accept the discount card? If the sales person refuses to provide such a list, do not do business with them.
- Who do I call if I have a problem with the discount plan? Can I cancel my membership at any time?
- Contact your healthcare provider to see if they accept the plan. If not, you could be throwing your money away.
Steer clear if you are pressured to "act now" because this is a "one-time offer." Purchasing health insurance should involve time and attention to details. Also, avoid salespeople or discount card companies that insist on debit card, bank account information or insist on a wire-transfer payment. Remember, before making a purchasing decision, contact your BBB and your state insurance department to find out if there have been complaints against the company.
For more tips you can trust, visit www.bbb.org.
Kelvin Collins is president/CEO of the Better Business Bureau of Central Georgia & the CSRA, Inc. serving 41 counties in Central Georgia and the Central Savannah River Area (CSRA). This tips column is provided through the local BBB and the Council of Better Business Bureaus. Questions or complaints about a specific company or charity should be referred directly to the BBB at Phone: 1-800-763-4222, Web site: www.bbb.org or E-mail: email@example.com or firstname.lastname@example.org