You’ve probably seen them on the net in the form of banners, pop ups, email blasts; “Save $XXX’s on Healthcare/Vision/Dental/Prescription Drugs/Whatever with XYZ discount plan”. They’re somewhat enticing, especially if you have these expenses.
They’re generally programs where you pay an upfront fee or subscription in return for a discounted price for products or services from participating vendors. You’ll also probably get a card that has your name and a member or plan number however this is not the same as insurance. Not to say that any particular discount plan is phony but there are a number of things to consider and a few instances that should raise a red flag:
If you already have a health insurance plan and you cancel it in lieu of a discount plan you may lose the ability to gain coverage for pre-existing conditions if you were to reapply, vendors and providers of a discount plan can change without notice. Also plans often advertise potential savings in an “up to…” amount, however “Up to 75% savings” does not guarantee 75% savings. The affiliates or marketers of these plans are usually not required to be licensed or registered with any state agency but the administrating company or organization usually is.
Some things that should cause you to raise an eyebrow are typical among other lines of business:
-The company or contact will not give you a list of vendors or providers untill you purchase the plan
-High pressure sales gimmicks such as “But you must act now!”
-They tell you to cancel your current health insurance
-Genuine discount plans should inform you This is not insurance” and that the plan does not pay for services but you will instead receive a discount at participating providers
-You are required to pay for everything up front such as yearly rather than incrimentally such as monthly
-If there is any insurance type of component attached to the plan such as a term life policy or accident indemnity the person selling the plan would need to be licensed. Its ok to ask them for their credentials- if their feelings get hurt when you ask this you should wonder why.
If theres any fine print attached it would definately be worth reading. If you still have any doubts you can always contact the consumer help line of your state’s Dept. of Insurance. In most states its either called Dept. of Insurance or Dept. of Financial Services.