One of the most important elements of a strong financial foundation is a health insurance plan that protects your from the financial hardships that often accompany major medical problems. Health insurance is something that most would consider a necessity although the recent healthcare debates on Capitol Hill have highlighted the fact that millions of Americans are uninsured.
One of the downsides of buying health insurance is that it can be costly. Most employers offer a health plan that provides medical coverage to employees and their family members at deep discounts compared to the coverage they could buy on their own. However, for people without access to an employer-sponsored plan, there is a temptation to buy the cheapest coverage they can find without seeing what is actually covered in the plan. Discount health plans are one of the most misunderstood tools available for accessing healthcare and many people buy into the plans without realizing what they’re actually buying. Here are some keys to understand about discount health plans.
Discount Plans Are Not Health Insurance: When you buy into a discount health plan, you’re not covered by any kind of insurance. All you’re getting is a discount if you use a medical provider in the plan’s preferred network. Many physicians are not a part of the plan at all and it can be difficult to find an updated list of providers. While advertisements may claim that plan members will receive discounts of up to 60% within the medical network, some doctors offer much lower discounts, even down to 5% off the regular price of coverage.
Don’t Cancel Your Real Insurance Too Soon: One of the biggest problems people are running into when it comes to discount health plans is that they’re canceling their employer-provided coverage before they read the fine print. If you opt out of your plan during the middle of the year, your employer often will not allow you to re-enroll until the end of the year and you could find yourself without coverage for several months.
Not All Discount Health Plans Are Scams: Discount health plans have a bad reputation, and with good reason. In California, there are more than 150 separate plans with complaints and pending litigation because of the fraudulent claims they’re accused of making. Still, there are a couple of plans in California that do exactly what they claim to do and that have had no complaints against them. Read the fine print on any plan before you enroll and check with both the Better Business Bureau and your State’s Insurance Department for any complaints that may have been lodged against a provider. Because discount health plans are not insurance products, they are not regulated by insurance commissions and can be sold by people who are not licensed professionals. In other words, know what you’re buying and who you’re buying it from!
