With current layoffs, rising costs and some companies no longer offering health insurance, consumers are looking for health care alternatives. BBB has learned that some individuals are considering medical discount plans, frequently advertised on TV, the internet and through telemarketing directly to consumers. However, BBB warns it’s not the same as health insurance.
“Some misleading claims leave room for consumers to think they are purchasing affordable health insurance, when, in fact, they have purchased a discount plan, which may or may not be of any benefit to them,” Matthew Fehling, BBB President/CEO said.
According to the Federal Trade Commission, some medical discount plans claim to provide big discounts from hundreds of providers for a wide range of services, from doctor visits and dental exams to hospital stays and prescription drugs. But many plans fail to make good on those claims. The FTC has found that although some medical discount plans provide legitimate discounts that benefit their members, many take consumers' money and offer very little in return.
The Better Business Bureau suggests you consider these facts before making a purchasing decision:
1. Medical discount plans are not the same as health insurance. The plans don’t pay for your health care costs. Discount plans are not licensed insurance services and generally can be sold by anyone at any cost with any benefits. While a company may provide a “discount identification card” it should not be confused with an insurance card or insurance coverage.
2. Providers in a discount plan “network” are often not bound to participate in the plan and may stop offering discounts at any time—depending on the plan.
3. Many plans may claim savings up to a certain amount. However “up to 40 percent” does not mean a guaranteed 40 percent savings.
Better Business Bureau offers the following tips if you are considering a medical discount plan:
- Know what you are buying—determine if it is medical insurance or a discount plan. If the company claims the plan provides insurance coverage, verify licensing with the Arizona Department of Insurance, at www.id.state.az.us or 800-325-2548.
- Find out all costs. Is there an annual fee? Is there a monthly fee? Is the plan automatically renewed annually?
- Before you pay, ask the company for a list of providers in your area. Call the providers, ask about their services and verify what discounts they offer through the plan. Verify that your current providers accept the discount plan.
- Ask for written information about the plan and review thoroughly. What are the costs, benefits and discounts? What is covered? What is the process for receiving discounts—do you have to pay the provider in full upfront and then request the discount from the company? Determine if the cost of the program outweighs the benefits. Read the fine print.
- Ask if you can you cancel your membership at any time. Make sure you read the fine print in any brochure or contract you receive and determine when and how you can cancel membership.
- Check out the company. Check the company’s record with BBB by visiting www.arizonabbb.org or by calling 602-264-1721 in Phoenix or 928-772-3410 in Yavapai County.
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