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Consumer Information on Discount Health Plans
Reprinted from Michigan
Office of Financial and Insurance Services (OFIS). (Editor's note:
this article was originally published in 2002 an is older than most resource
materials on this Web site so it's usefulness may be diminished by its age in
relation to the evolution of the discount health plan industry).
“Discount health plans have emerged as an attempt to meet the needs of individuals without health insurance or are underinsured for a variety of reasons,” said OFIS Commissioner Frank M. Fitzgerald. “However, it is important to remember that discount health plans are not health insurance and should not be viewed as comprehensive coverage.”
An OFIS Insurance Counselor is available on discount health plans. You can receive this publication by calling OFIS toll free (877-999-6442) or on the web at http://www.michigan.gov/documents/cis_ofis_ip221_42313_7.pdf.
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:
Some disadvantages of discount health plans include:
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.
Consumers can check with the Better Business Bureau, the Bureau of Health Services, the Division of Health Facilities and Services, or the Office of Services to the Aging to determine license status of individuals and facilities associated with a discount health plan. All of these agencies can be accessed on the State of Michigan web sites at www.michigan.gov or the State of Michigan directory service can be reached at 1-800-856-6246.
|Please note that this is not health insurance and we do not make payments directly to medical services providers. It is a discount program, and you are obligated to pay for all health care services. You will receive discounts for medical services at certain health care providers who have contracted with the plan. This plan is administered by CAREINGTON International Corporation, 7400 Gaylord Parkway, Frisco, TX 75034. The program and its administrators have no liability for providing or guaranteeing service or the quality of service rendered. Note to Utah residents: this contract is not protected by the Utah Life and Health Guaranty Association.|
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