GALLAGHER OFFERS WARNING ON MEDICAL DISCOUNT CARDS
Chief 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.
With the increasing number of advertisements and promotions of prescription drug and healthcare discount card programs, it’s 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.
While 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.
- Most plans require advance notice of utilization of discounts in order to honor them. In some cases, 7 days notice is needed for a doctor’s visit, and 30 days notice is often required for hospitalization.
- Some 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 discounts offered.
- Terminating health insurance and opting into a medical discount card program may hinder an individual’s ability to regain coverage at a later date. And even if coverage is granted, any pre-existing conditions would be excluded.
- A 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. Don’t sign up for any program in which the benefits aren’t clearly spelled out.
Medical discount cards, and recognizing legitimate benefit plans from “discount cards” and plans marketed by unlicensed entities, was an issue raised by the Governor’s 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.