Donâ€™t Confuse Discount Health Plans with Health Insurance
Government agencies and consumer advocate groups are warning those shopping for new health insurance about â€œdiscount health plansâ€ being marketed by some unscrupulous companies. The â€œdiscount cardsâ€ provided by these companies are not health insurance. Most of these programs are unregulated and none of them offers the type of protection policyholders get from an actual health insurance plan.
Although agencies have been warning consumers about these plans for years, they have come back in greater force because of the Affordable Car Act (ACA). The new law has many Americans reviewing their health insurance options, but many inexperienced shoppers looking for affordable health insurance are getting easily fooled by discount plans.
The Danger of Discount Health Plans
The affordable health insurance plans marketed through the ACA offer comprehensive coverage that pays a predetermined benefit, spelled out in the policy’s literature. The premium, deductible and out-of-pocket expenses are clearly identified for shoppers before they purchase the health insurance coverage.
However, discount health plans are much different. Instead of covering most of your health insurance costs, the plans only offer a small discount. In exchange for a fee, they provide consumers with a list of medical providers that offer discounts through the program, often much lower than the amount advertised.
Other risks of discount health plans include:
- Unregulated fee amounts charged by sellers
- A lack of a maximumÂ out-of-pocket amount
- Some fraudulent plans simply seek out personal information for identity theft purposes
- Providers in the discount plan can withdraw from the network at any time.
Finding Affordable Health Insurance
Shoppers who decide to purchase discount health plans instead of health insurance should protect themselves from the pitfalls of discount programs. One way to do so is by demanding a list of health providers and their discounted rates up front.
Be aware of the plan’s cancellation policy before signing up, and finally, donâ€™t forget to check the company’s rating on the Better Business Bureau and Federal Trade Commission websites for information on alleged discount health plans before paying for a membership.