Scam Alerts
Discount Medical Cards
The hidden price you can pay
The scams
Looking for affordable health insurance? Know the difference between health insurance and discount health or medical “cards.”
Many companies are selling so-called discount health cards to consumers seeking affordable healthcare. Usually for a monthly fee, the cards claim to save subscribers money by offering discounts on physician visits, hospital stays, prescription drugs, dental work, eyecare and other treatment.
Spreading
Discount health cards are spreading rapidly. Many may offer valuable, money-saving benefits for people without health insurance.
But discount health cards also can be confusing, because they are not insurance. You still must pay the medical bills yourself. These cards simply offer lower prices on services that accept these discounts.
Growing numbers of discount cards also are deceptive or fraudulent.
Lure unwary
To lure unwary customers, their ads can make it seem they’re selling real insurance. They can also make grossly inflated promises about savings and benefits. Many cards thus can cost you far more money than they’re worth.
And because discount cards aren’t insurance, there may be fewer consumer protections because your state insurance department may not regulate them. Nor do the salespersons necessarily need a license or healthcare background. In other words, you may be on your own. Here’s what you should know…
The price you pay
Lose your health coverage. You could give up your current health coverage, mistakenly believing you found a better insurance deal. In fact, you'll have no health coverage and must to pay large medical bills out of your own pockets. Imagine arriving sick or injured at the hospital or doctor’s office, then presenting your discount card only to find you have no health insurance.
You’re saddled with large medical bills. You’ll have to pay medical bills yourself if you’re fooled into believing you have real insurance.
The promised discounts may not exist, or may be exaggerated. Hidden administrative fees and other hidden costs can eat up your discounts. In the end, you may have to pay more money than you thought.
Your health care may be compromised. The medical providers and treatments the cards promise you may not exist.
Your money, identity and financial information could be stolen. At least one company obtained the credit card and checking account numbers of consumers when it tried to sell them discount cards over the phone, and then billed their credit cards unauthorized charges even when consumers declined the cards, the U.S. Federal Trade Commission alleges.
Fight back
Ask the right questions before signing up...
- Insurance or discount? Know the difference between health insurance and a discount card. Ask whether the card is insurance that covers your treatment, or is a discount card that still requires you to pay all bills yourself.
- Slippery sales pitches. Be wary of slippery sales pitches. Here are several warning signals...
- “Save up to 60 percent on healthcare”
The term “up to” is meaningless.
- “Affordable health coverage”
Calling it coverage could deceive you into thinking you have
real insurance.
- “Guaranteed” benefits. Could
sound like insurance, and not all cards can deliver on their
promises anyway (see below)
- “Longterm care” discounts. Do not mistake this for true longterm health insurance.
- Fine print. Make sure the fine print agrees with the promises in the sales pitches.
- Your treatments? Does the card offer discounts on the medicine and treatments you need? Find out exactly what medical conditions, medicine, treatments and other services are included. Even if your medicines are discounted, check to see whether generic drugs are cheaper.
- Clearly listed? Are prices clearly listed? Do they offer a clear discount over what you now pay?
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Deliver the promises. Discount health cards may sell you little more than access to a large mailing list of medical providers that it purchased commercially. Providers don’t always know they’re even listed, and thus may not give you promised discounts. Provider lists even could have outdated and useless names. Don’t assume you’re getting access to a large provider network just because your discount card displays the network’s name and logo. If you plan to use a specific listed doctor, hospital, pharmacy or other provider, ask a few questions before you sign up. Such as…
- Do the listed doctors, pharmacies, hospitals
or other providers participate?
- Do your current providers participate?
- Will they honor the advertised discounts?
- Can they help explain the card so you have advice from trained professionals?
- Do the listed doctors, pharmacies, hospitals
or other providers participate?
- Hidden fees. Are large administrative fees hidden in the fine print? They can quickly eat up your discounts. Especially, watch for fees charged for each use of your discount card.
- Evasive pitches. Be wary if the telemarketer or other sales person seems evasive, ill-informed or is reluctant to provide you detailed material about the card. Ask specific questions, and demand specific answers.
- Credit card fraud. Avoid giving your credit card and checking account numbers to strangers selling discount cards over the phone or the Internet. Fees for the card, for example, might be charged to your credit card even if you didn’t sign up.
- Refundable? Know whether your membership fee is refundable if you cancel, whether you can cancel at any time, and the procedures for canceling.
- Other people complaining? Contact your state insurance department and Better Business Bureau to see if other consumers have complained about a discount card you’re considering.
- Contact authorities. Contact your state insurance department and Better Business Bureau if you suspect a scam. Your insurance department may not regulate the cards, but can help refer suspected fraud to the right authorities.
