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Medical Discount Plan vs. Health Insurance
Posted By Miranda Marquit On 09/14/2011 @ 12:16 pm In Health Care | 3 Comments
The rising cost of health care and the increase in health insurance premiums have many turning to more unorthodox methods of accessing affordable health care services. One of the rising trends has been toward medical discount plans. These are plans that purport to offer you discounts on different health care services, for a fee.
Medical discount plans can be helpful in some cases, but you do need to be careful. A medical discount plan is not health/medical insurance, and you may not get what you pay for.
Here’s how it works: You pay a fee, and you get a discount card. You also get a list of providers that are part of the program, and when you use those providers you get a discount on medical services. A lot of the ads for medical discount plans market them as “health care plans” without co-pays and deductibles. A lot of them also use “PPO” (preferred provider organization), a common health insurance term that doesn’t have to apply exclusively to health insurance.
Your discount card can get you prescriptions, some services, and other health care related products for up to 60% off. For those who have a hard time affording health insurance, this can seem like a great deal. And it can be — if you sign up for a legitimate plan. But you do have to be aware of the limitations.
As you determine whether or not to sign up for a medical discount plan, remember that it is not insurance — no matter how much like insurance the “health care plan” sounds like. While you can get discounts on some products and services, a medical discount plan will not offer the same protection that health insurance will if you end up with a major medical problem and wind up in the hospital. Legitimate medical discount plans can help you defray out of pocket expenses related to dental visits, eye doctor visits, some prescriptions and even some doctor visits (check to see if your health care providers are included in the program before signing up), but they are no substitute for health insurance for the big stuff.
Some people get major medical insurance for the big stuff, for the lower premiums, and then get a medical discount plan to help reduce out of pocket expenses. (A HSA can help as well.) As long as your health care expenses are relatively low, this can be a reasonable solution for some.
If you do decide to look into medical discount plans, make sure to run the numbers and ensure that it makes sense for you, and that there are enough participating providers in your area. Then double check to make sure that the plan is legitimate. Some of the things you should do include:
These plans aren’t for everyone, and you could end up wasting your money, so plan carefully.
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