Services for Consumers
Alert! Consumers and Business Owners
Be Careful When Purchasing a Discount Health Card:
With health care premiums on the rise, many North Carolinians are searching for more affordable health insurance. It appears those factors have led to an increase in the marketing of discount health plans across this state and country. Discount health plans are neither insurance nor a substitute for insurance. It is important to know the difference between health insurance and discount health plans, and to be able to distinguish between legitimate and fraudulent plans. Legitimate discount health plans offer discounts on services from doctors, facilities and other health care providers, who accept and honor the plans’ cards.
- Buyers Beware!
Because discount cards are not insurance, fewer consumer protections exist for buyers. Currently, there are no state insurance laws that enable the Department to regulate discount health care plans
- Double-check the Company and Agent
Some insurance carriers offer discount cards at little or no cost as an added value to their members. Certain associations, banks, employers and others also provide discount cards. However, there is the potential for confusion and fraud with respect to discount cards. Discount plans are not licensed (even when sold by insurance agents) and can be sold by anyone. Beware of salespeople and advertisements that use words like “co-payments” or “premiums” to deceive consumers into thinking a discount plan is insurance. Avoid sales personnel or companies of discount plans that insist on debit or credit card information and who pressure you to make quick decisions. Ask the sales person or company if the product is an insurance plan or a discount plan. Contact your state Attorney General and the Better Business Bureau to see if complaints have been made against the entity.
- Check the Benefits
While some deceptive discount health card issuers claim that their products are insurance, discount cards generally do not process or pay medical claims. Instead, enrollees are responsible for paying for services at the time care is received. Some discount plans may exaggerate the savings potential, and promise discounts that might not be available. Also, many of these misleading discount plans do not cover all types of services or conditions. Check with the company to make sure that there is a provider in its network that meets your needs, and then confirm directly with the provider that the plan is accepted. Even if the card produces discounts as promised, you could still owe thousands of dollars if you are hospitalized. Make sure that the discount plan has a toll-free phone number for customer service, a reasonable complaint procedure and clear refund and cancellation policy.
- Discount Card "Red Flags"
Here are some warning signs of possible fraudulent plans:
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- Advertised through blast faxes, spam e-mails, Internet pop-ups or signs posted on telephone poles.
- The company claims you can save a considerable amount on health insurance.
- The company or agent will not give you a list of providers until after you purchase the discount card.
- The company uses high-pressure marketing and an extreme sense of urgency, telling you that you “must act now” or “this is a one-time offer.”
- You are asked for debit or credit card information or a large up-front fee. Legitimate discount cards will not mandate large application fees or up-front costs.
- Legitimate discount card issuers will state on all their marketing material “This is not insurance.”
- Legitimate discount card issuers will never suggest that you drop your existing health insurance.
- Some discount card plans may advertise extravagant savings and discounts, such as 50 to 80 percent savings. Be wary of such claims.
- If it seems too good to be true, it probably is!
Information is your best defense. Consumers considering enrolling in a discount plan should check with the Attorney General’s Office, Consumer Protection Division toll-free at 866-867-6272 to see if any complaints have been received about a specific plan.
How to Reach Us
You can reach the North Carolina Department of Insurance, Consumer Services Division at:
855-408-1212 (toll free)