Medical Discount Plan or Health Insurance?

The truth about Medical Discount Plans
The Federal Trade Commission announced today that they’ve charged another defendant in an alleged health care scam. The FTC claims that the organization misled consumers into believing they were buying low-cost health insurance, when in fact, all the organization was offering was a medical discount plan.

While a medical discount plan can benefit certain consumers, it is vastly different from a health insurance plan. Consumers should be aware of what type of plan they are getting before they send in their money or give the company their credit card number or checking account information.

First, let’s look at health insurance plans.
Generally, health insurance pays a percentage of a wide array of your health care services. If you have a deductible for items such as x-rays and laboratory work, you’ll have to pay the deductible out-of-pocket before your insurance begins to cover all of the costs for services, but you may be eligible for discounts on those types of services simply because you are insured.

For routine doctor office visits, insurance plans typically have what is known as a co-pay - a set dollar amount that you pay for each visit and generally ranges from $20-$35 depending on which plan you choose. Your health insurance will generally cover the rest.

Premiums can vary according to the insured’s age, health, risk factors, and even what state and area they live in. The cost of a health insurance plan can vary widely depending on the plan and the insured’s personal factors, but typically health insurance premiums cost around $200 a month and up for a generally healthy adult.

A medical discount plan works differently.
Instead of covering part of the cost of your health care, medical discount plans don’t pay any of your health care costs. Typically, they require you to pay a fee for a list of health care providers and sellers of health-related products who are willing to offer discounts to members of the plan.

The cost for a medical discount plan is dramatically lower than the cost for health insurance, because the benefits they provide are very limited. Prices have been advertised around $30-$60 a month, but this is just a guideline. If the company gives you a quote that is extremely low compared to insurance quotes you’ve obtained from a legitimate health insurance provider, be aware that it is likely to be a medical discount plan.

The FTC and many states have 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 FTC advises consumers to check with their state insurance commissioner to see if the company offering the plan is registered to sell insurance in their state. If the company is not registered to sell health insurance and you want to buy health insurance, consider shopping elsewhere.

Health insurance coverage that is available to you may be affected by your state’s requirements or limitations. The best way to understand your options and the costs is to contact your insurance provider for a health insurance quote and an explanation of the coverage provided. And finally, once you get a plan in effect, read your health insurance policy and be sure you understand and agree with the terms of your health coverage.

This article is meant for informational purposes only and is not intended as health insurance advice.



Source:
Federal Trade Commission