A Consumer s Guide to Discount Plans As health care by richman5


									A Consumer’s Guide to Discount Plans
As health care and prescription drug costs escalate to the point of becoming unaffordable for
many individuals, plans that offer discounted fees and rates for certain covered treatment,
services and supplies have evolved and become common in today’s marketplace. For purposes of
this brochure, the term discount plan refers to a product marketed to individuals that allows
members access to various networks of contracted providers; i.e., physicians, dentists,
chiropractors, hospitals, etc., who have agreed to provide their services to members at discounted
fees and rates. Such plans typically charge members a monthly membership fee for access to the
discounts provided by the plan.

Discount plans may be marketed to consumers as one way to save money on various medical
services, such as medical, dental and vision care, as well as pharmacy and chiropractic services.
When a plan member uses one of the contracted providers for a service covered by the plan, he or
she should be charged a discounted rate for the service. The amount of the discount may vary
depending on the contracted provider’s normal charge and the terms of the discount plan issued to

Discount plans that limit benefits to discounted health care fees and discounted prescription drug
costs are not considered insurance products under North Carolina laws, and currently are not
regulated by the North Carolina Department of Insurance. Complaints and inquiries regarding
discount plans are handled by the Attorney General’s Office, the Consumer Protection Division
can be reached toll-free at (866) 867-6272.

You should consider the following if you are thinking about purchasing a discount plan.

    •   Discount plans are NOT a substitute for health insurance.
    •   Discount plans are not licensed (even when sold by insurance agents) and can be sold by
    •   The protections and rights available to consumers under licensed health insurance plans
        are not available to members of a discount plan.
    •   Discount plans do not qualify as “creditable health insurance coverage.” Therefore, if you
        drop your health insurance after purchasing a discount plan and later decide to purchase
        health insurance again, your new insurance may not cover pre-existing conditions, until a
        new waiting period has been satisfied.
    •   Providers in a discount plan’s network may drop out of the network and stop offering the
        discount without any advance notice to plan members.
    •   Some plans may advertise extravagant savings and discounts, such as 50 to 80 percent
        savings. Be extremely wary of such claims.
    •   Seniors should be especially careful when considering one of these plans. Some providers
        may not honor advertised discounts below scheduled Medicare rates.

Important questions to ask before purchasing a discount plan:

    •   If you already have insurance, how will a discount plan add value?
    •   How long has the plan been in business?
    •   Where is the plan’s corporate office located? (You may need to resolve a complaint or
        other issue with authorities in the state in which the corporation originates.)
    •   How do you contact the corporate office?
    •   What methods are provided to settle a dispute?
    •   What is the enrollment fee?
    •   What is the monthly fee?
    •   Are there any other costs of the program?
    •   Is the discount applied at the time of service/purchase?
    •   How do you know the fee will not increase or the discount change?
    •   Is there a minimum enrollment time?
    •   How do you cancel enrollment?
    •   Does your provider (e.g. pharmacy, physician and hospital) accept the discount card? Be
        sure to check with your providers and verify the information provided by the plan.
    •   Can you obtain the same savings without the card?
    •   Will your personal information be disclosed to other parties?
    •   What other options are available to you?
    •   Does the plan provide you with documentation detailing exactly what benefits you are

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
For insurance related matters, you can reach the North Carolina Department of Insurance,
Consumer Services Division at:

800-546-5664    Toll free inside North Carolina
919-733-2032    Outside of North Carolina
919-715-0319    TDD (Telephone Device for Deaf Caller)
919-733-0085    Fax

You can find additional information, including our complaint form, on the North Carolina
Department of Insurance Web site at www.ncdoi.com.

The address for the North Carolina Department of Insurance, Consumer Services Division is:

Consumer Services Division
North Carolina Department of Insurance
1201 Mail Service Center
Raleigh, NC 27699-1201

                                                                NCDOI 904 (September 03)

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