A discount health plan asks the consumer to pay the discount health plan company a certain amount of money each month or year. For payment of this fee, the consumer is enrolled in a plan and provided with access to discounts for health care services or prescriptions if you go to a doctor, medical care facility, hospital, or pharmacy that has a contract with the discount health plan. Those health care providers have agreed to accept a lower payment from the discount health plan member. The discount is usually a percentage of the provider’s regular fee.

Most regulated health insurance companies do not offer the discount plans, except for specialized services such as prescription discounts. The companies that do offer the discount plans are businesses formed to market discounted health services for a monthly or yearly fee to the member. The services for which they offer discounts range from medical, dental, vision, prescriptions, vitamins, as well as other health services.

Advantages of discount health plans include:

• The plans can help augment a high deductible insurance policy.
• If there is no health insurance, health plans can decrease what is paid for necessary health services.
• Some discount health plans do not have a pre-existing condition exclusion.

Some disadvantages of discount health plans include:

• Some plans require that the patient have no health care expenses for a previously determined amount of time.
• It is difficult to determine if the providers in the discount health plan network are truly offering discounts.
• Consumers should check the savings in provider fees against the cost of the annual membership fee.
• If you enroll in the discount plan, you may not be able to continue seeing your current physician in order to receive the discount.
• Consumers need to check the background of the provider that has agreed to accept the discount.

In Michigan, these plans are not considered health insurance since they do not assume any risk nor do they pay for health care expenses. The plans negotiated a lower rate with the provider and for that negotiation a fee is paid. The plan does not pay the provider for the service; the consumer pays. As a result, the discount health plans are not regulated under any of the current Michigan Insurance Code laws.