This past Friday the Massachusetts Attorney General’s Office announced new regulations designed to protect Massachusetts consumers by preventing the deceptive marketing of discount health plans.
For many, these plans are pure scams – deceptively sold as insurance but providing no real insurance benefits.
A discount health plan requires you to pay a monthly or annual fee and in return you receive a discount on a limited number of medical services and providers. However, doctors may charge patients enrolled in discount health plans a higher fee than the doctor actually receives as reimbursement from an insurance company for the same services. Thus, the discount may not save the patient as much as it appears.
Discount health plans are not the same as health insurance and purchasing one instead of health insurance may subject people to a tax penalty under the individual mandate of up to $1,068 per year.
In some cases, a discount health plan may provide a good supplemental benefit for individuals who have health insurance with high-deductibles. These plans may also provide supplementary dental, vision or prescription benefits.
The new regulations are designed to protect consumers from deceptive advertising practices and enable people to make informed decisions and navigate your way through the complex health care system. Specifically, the regulations require discount plans to disclose that they are not insurance coverage and that enrollees are responsible for paying out of pocket for all services or products they receive. Discount health plan organizations are also now required to maintain and provide consumers with up-to-date written contracts with all participating health care providers.
You should consider all state-subsidized health insurance options before purchasing a discount health plan. For more information, please call the Health Care for All Helpline at 1-800-272-4232, and check out the Attorney General’s helpful consumer advisory (pdf).
-Shoshana Speiser
And, how about the scam of minimum creditable coverage, which is not necessarily what the Connector considers as good insurance?
In recent years, state regulations such as those recently passed by Massachusetts have forced many disreputable health discount programs out of the market. Most of those that remain — especially those that belong to the Consumer Health Alliance (CHA), the trade organization for the discount health industry — are creditable organizations offering consumers real savings on out-of-pocker health care purchases. Discount plans are NOT substitutes for health insurance; and reputable discount plans do not market themselves as such. What discount plans can offer consumers is reduced rates on non-covered or above-limit services. They can also help make health care more affordable for consumers without access to affordable coverage. It is true that the available discounts are often not as deep as those given to insurance companies, which have vast leverage with provider networks. But, even savings of 10-50 percent can help put health care within reach of many consumers.
“Discount health plans are not the same as health insurance and purchasing one instead of health insurance may subject people to a tax penalty under the individual mandate of up to $1,068 per year. ”
And even if you buy a “catastrophic” plan, which would protect you in the event of a major illness, you would STILL be penalized by the MA
government, as did one couple who had a catastrohic insurance plan, and paid for their own care in cash.
This disproves he garbage claims of uninsureds costing everyone money. No sir, that couple weasn’t a burden to anyone. Their crime was not subsidizing the physical misfits.