Since Congress passed the new Federal Health Reform Law, there has been a significant up-tick in scammers marketing inexpensive health care plans. State and Federal agencies trying to rein in Medical Discount Plans and Limited Benefits Plans are, in effect, playing a losing game of wack-a-mole. Consumer protections that target a given product in one state or nationally, are foiled by several other slightly different variants that pop up to fill the void.
In brief, these plans are as follows:
Medical Discount Plans
- Charge monthly membership fees that some customers mistake for insurance premiums.
- Their promise is to provide a list of doctors and hospitals offering discount rates.
- The plan does not cover any medical bills whatsoever.
At present, these plans are targeting low-income people and those persons having pre-existing health conditions. After paying a hefty enrollment fee and monthly fees, the promised deep savings are often minuscule or even smaller than what a patient could negotiate independently.
The Federal Trade Commission (FTC) has issued some 32,700 alerts regarding medical discount plans. for complete access, GOOGLE “FTC consumer alerts for medical discount plans. “In addition, the Department of Health and Human Services(HHS) has issued 45,300 consumer alerts for medical discount plans. To access this information, GOOGLE “HHS consumer alerts for medical discount plans.” Some 10 companies offering health insurance discount plans can be found at http://wwwinsurancepickle.com/health-insurance/discount-plans.shtml.
- These plans operate very much like traditional insurance with monthly premiums and reimbursements.
- They cover only very specific procedures up to set dollar amounts. Often for considerably less than the actual cost.
- The plans offer no catastrophic coverage.
These plans go after a similarly vulnerable slice of society, providing scant coverage in exchange for monthly premiums that are lower than those for taditional insurance, but typically still quite high.
FTC has issued some 9,800 consumer alerts for Limited Benefits Plans. GOOGLE “FTC consumer alerts for limited benefits plans.” Likewise, GOOGLE “HHS consumer alerts for limited benefits plans.”
A final word from the National Association of Insurance Commissioners (NAIC). They warn consumers who have been offered a policy that is a “limited time offer,” has “limited benefits” or is advertised as “necessitated by health reform” to immediately STOP! Sign nothing, make no payments and call your state insurance department to confirm that the policy, agent, and company are legitimate.