Discount Health Insurance Plans: It’s Not Medical Insurance
Are you thinking about enrolling in a discount health insurance plan in order to save money on healthcare costs? Be Careful! I have reviewed several popular discount health plans, and before you decide to write a check (including a non-refundable processing fee), here is a list of things you need to know:
What is a Medical Discount Health Insurance Plan?
Despite the fact that many discount health plans usually have “healthcare plan” or "affordable health plans" in its name; a medical discount health plan is not health insurance. Instead, it is much more like a membership or club that offers slight reductions in healthcare costs, sometimes as little as 5%. Unlike health insurance, you will be responsible for all of your healthcare costs.
How does a Medical Discount Plan Really Work?
You may have noticed that the only explanation offered by a medical discount plan is that its members receive a discount on healthcare costs. The plans don’t bother to explain how the discount was obtained.
A medical discount plan simply calls healthcare providers and asks if they are willing to reduce charges by a certain percentage if the plan refers patients to them. This is something that anybody is able to do, even an individual.
Can You See Any Doctor You Want?
Medical discount plans have a list of providers that offer a discount. Just because you are purchasing a discount plan does not mean that you will be able to obtain savings from any physician or any hospital.
What Discounts are you Really Getting?
You may have noticed that most medical discount plans offer two types of plans typically listed as basic or premium, gold or platinum, premium or ultimate. The higher plan is more costly (often more than double the cost of the basic plan), because it is the plan that offers physician and hospital discounted services. The cheaper plan will often exclude these common and most utilized services.
It is important to realize that there may be limits on how many visits you are able to obtain at a discounted rate. Some medical discount companies state they offer emergency room discounts but, in the fine print, there is a maximum of two or three visits per year. This can apply to every service available through a medical discount plan, including physician visits, chiropractic care, dental and vision care, and podiatry.
So if you are looking for a medical discount plan because someone in your family has a chronic illness, like asthma, and is often seen in the emergency room or urgent care, you might just be adding to your healthcare costs by purchasing a discount plan.
Be Leary of Examples:
While reviewing some of the savings that discount plans offer, I noticed that they give examples of the best savings it was able to obtain (over 60% discounts), and the savings are not typical. This will be in the fine print by indicating that savings and prices vary by provider type and location.
Checklist Prior To Purchasing a Discount Plan:
Read the fine print:
Is there a limit on the number of visits you will receive a discount on?
What is the refund policy if you are dissatisfied, and are you able to cancel at any time?
Get a list of providers and call them:
Ask the discount plan for a list of providers in your area. Make sure it is up to date. Call the provider you want to utilize in order to make sure they do, indeed, participate in the discount plan. Verify with the provider the savings it offers, and ask if there are any exclusions or limitations.
You should also ask the provider if they are willing to negotiate a discount with you, personally.
Figure out your savings:
Add up the amount of money it is going to cost you to participate in a discount program, including one-time charges, monthly service fees, etc. You might find that you will be paying more money than you will save, especially if the provider you choose only offers a 5% discount.
Check for similar offers with clubs or organizations you belong to already:
There are many organizations that offer similar discount savings on healthcare, including AARP, credit unions, and auto clubs like AAA. Check with any clubs or organizations you belong to and ask if they offer discounts for healthcare services.
Check with the Better Business Bureau and other consumer agencies to find out if there have been any complaints filed against the medical discount program before you decide to purchase one.
Lastly, it is important to realize that what you are paying for is a middle man for price negotiation—something that you are able to do on your own. If you are interested in learning how to negotiate medical payment with a doctor, you should read my hub: Negotiating Medical Payment with Your Doctor.