You’ve most likely seen an internet, print, or television ad for an affordable health care plan that doesn’t have deductibles or co-pays, has thousands of PPO network providers, doesn’t discriminate against pre-existing conditions, has discounts on medical services of up to 60%, and so on.
It may appear that such ads are for health insurance, but most of them are actually offering a medical discount plan, program, or card. For more information about how discounts differ from insurance, see Medical Health Discounts Benefits.
Medical discount ads are often aimed directly at individuals looking to cut the cost of health care. While these plans can help some consumers save money on certain services, they shouldn’t be confused with health insurance.
Health care plans typically cover a broad spectrum of services, products, and procedures with a payment either directly to the provider or the insured individual. Unlike health insurance, medical discount plans don’t pay any portion of an individual’s medical expenses.
A medical discount plan charges fees to become a plan member and provides a list of participating providers who offer reduced rates on certain services, procedures, and products.
Many medical discount plans claim members can obtain large discounts from hundreds of providers for hospital admissions, prescription drugs, dental visits, and doctor visits. For information that focuses on dental discounts specifically, see Dental Health Discounts Benefits.
Some plans do provide the discounts they promise, but the Federal Trade Commission (FTC) has found many plans don’t deliver what they advertise and provide very little in return for the fees charged.
The most important thing—whether you’re considering a medical discount plan or traditional health insurance—is that you know what you’re getting. You can contact your state insurance commissioner to determine if an insurance company is registered to sell insurance in your state.
If a company isn’t registered to sell health insurance in your state, consider an alternative insurer. For more background about providers and marketplace options, see Medical Care Providers Insurance. If you remain unsure, you can also talk to an agent.
Before you buy
- Check the medical discount plan’s website. Look for a phone number or local office so you can speak with a real representative.
- Contact the Better Business Bureau, local consumer protection agencies, or the attorney general’s office to see if the entity offering the plan has complaints or ethics violations on record.
- Ask for a full listing of the plan’s providers. Call several providers on the list to confirm what discounts they offer for specific services. If a plan refuses to provide its provider list until after you purchase, consider a different plan.
- See if your usual dental and medical providers are on the plan’s list. If they’re not and you plan to change providers, ask if the plan will offer an initial consultation with a participating practitioner before you commit to membership.
- Pay attention to the plan’s fine print and refund policy. Ask questions if you don’t understand any element of the contract.
- Some plans require an upfront lump-sum payment, monthly fees, and/or additional per-use fees. Run the numbers to determine if the plan’s total cost could exceed any expected savings.
- If a plan’s representatives can’t or won’t answer your questions before you buy, they are unlikely to be responsive after they have your money.
- You may be able to get a discount without paying for membership. Ask your usual providers if they will offer a reduced rate or payment plan before buying into a discount program.
Frequently Asked Questions
How is a medical discount plan different from health insurance?
A medical discount plan provides reduced rates from participating providers but does not pay or insure medical expenses; health insurance pays benefits under a policy contract.
Will a medical discount plan cover pre-existing conditions?
Discount plans may include participating providers who will treat anyone, but the plan itself does not insure or guarantee coverage of conditions the way health insurance might.
What should I do if a plan won’t provide its provider list before I buy?
Consider that a red flag and avoid purchasing until you receive and verify the provider list and discounts for the services you expect to use.
Can I get comparable discounts without joining a plan?
Sometimes yes; many providers will negotiate or offer payment plans directly, so ask your usual providers before paying for a membership.