GALLAGHER OFFERS WARNING ON
MEDICAL DISCOUNT CARDS
Financial Officer Tom Gallagher is alerting consumers who may be thinking of
purchasing a medical discount card or joining a medical discount plan that these
programs are not health insurance.
the increasing number of advertisements and promotions of prescription drug and
healthcare discount card programs, itís important for consumers to be aware of
the nature of the discounts and the conditions. Because these programs are not
health insurance, the companies and their marketing representatives are not
regulated by the Department of Financial Services.
some programs may offer substantial savings, consumers should consider the
following before making the decision to join a plan:
Consumers are often required to pay a monthly fee of $20 to $100 before
getting access to savings.
Discount card programs offer only a reduction in the actual cost of
prescriptions or medical services. For example, a card that provides a
20-percent savings would leave a consumer who had a $100,000 medical expense
with $80,000 in out-of-pocket costs. In addition, most participating
providers require payment in advance.
plans require advance notice of utilization of discounts in order to honor
them. In some cases, 7 days notice is needed for a doctorís visit, and 30
days notice is often required for hospitalization.
plans offer discounts only on certain drugs. In many cases, purchasing a
generic drug is cheaper than applying the discount to a name-brand drug.
Check with local pharmacists to confirm their participation and note the
Terminating health insurance and opting into a medical discount card program
may hinder an individualís ability to regain coverage at a later date. And
even if coverage is granted, any pre-existing conditions would be excluded.
few plans may use marketing tactics that lead consumers to believe they are
purchasing insurance coverage. Call us at 1-800-342-2762 to ask questions
about any discount plan in which you are thinking of enrolling. Donít sign up
for any program in which the benefits arenít clearly spelled out.
discount cards, and recognizing legitimate benefit plans from ďdiscount cardsĒ
and plans marketed by unlicensed entities, was an issue raised by the Governorís
Task Force on Access to Affordable Health Insurance. Gallagher, who co-chaired
the task force, said they recommended developing appropriate regulations and
disclosure requirements specific to the expanding market of medical discount
cards and plans.
According to Gallagher, legislation to regulate this new and widely advertised
product will likely be addressed during the upcoming legislative session.