Discount Plans vs. Health Insurance



A woman from Las Vegas thought she was buying health insurance. It
looked and sounded like health insurance. The Las Vegas woman is
not 65 yet, which means she can’t get Medicare. So, she went online
looking for health insurance. She ended up finding something called
Healthcare Advantage, and signed up after paying $100. Come to find
out, this was not medical insurance at all and the sales
representative never told this poor lady. She found that out when
her cards arrived in the mail. In tiny writing at the bottom, it
read, “not an HMO, PPO insurance or managed care company”. This was
a discount plan. These plans do not have the same coverage as a
full medical health insurance policy. Make sure you know what you
are getting and if it fits your needs.

So what is a discount plan? The plans claims to save people money
by offering discounts on physician visits, prescription drugs,
dental work, eye care and other treatments for a monthly fee.
Unlike normal health insurance, which is very costly and very
selective about who it covers, a discount health plan accepts
everyone, no matter what health conditions they may have. You will
use a list of doctors that are willing to charge discounted rates
to the subscriber. Discount is not the same as coverage, and so you
will pay more for visits and other services that you wouldn’t with
a regular medical plan. The average savings is only 25% that could
be very expensive if you have to see a specialist or require
surgery. These networks claim to have as many as 400,000 doctors
and 50,000 hospitals available to choose from, but what if none of
them are near you? You can get a savings of up to 30% on both
generic and brand name drugs, which can also be costly if you have
multiple prescriptions or they are costly ones. So if you have a
health plan already but have a high deductible, this extra plan may
help save you some money. But to use as a complete health plan, it
really isn’t designed for that and will cost you more than a great
HMO.

HMOs and other medical plans can offer full medical coverage at
great rates. Managed care plans are the way to go for those who are
limited on funds. They offer the best policies for the least amount
of money. Most of these plans are available to anyone and can save
you a ton of cash. You can make the plan even more affordable by
asking for a deductible, which will lower your monthly expense.
Most HMO’s do not have one at all but, you can request one, and
most basic PPOs and POS only have a small one, usually $200 to $500
per year, which you can also asked to raised. The co-pays are also
very reasonable with these types of plans. If you choose to
purchase an HMO, expect to pay about $5-$10 per office visit and
per prescription. With PPOs and POSs you will have a 20% co-pay
with both visits and medications. The differences are how strict
they are and you pay more of a co-pay to have extra flexibility.
Usually a PPO or POS plan is less expensive and you have more
freedom to see whom you want so the insurer makes you more
responsible for payment. HMOs tend to be the least expensive and
best policies for people with fixed incomes.

Make sure you know what your needs are and double-check what you
are getting. If you need full medical coverage with low co-pay then
a discount plan will not work for you. If you are already covered
by a medical group but have a large deductible then you might
benefit from the extra savings a discount plan can offer. Also, ask
whether the plan is insurance that covers your treatment, or is a
discount plan that still requires you to pay all medical bills
yourself. Beware of slippery sales pitches. Make sure you know
what’s being offered. Discount health plans may only sell you
access to a large mailing list of medical providers that it
purchased commercially. Don’t assume you’re getting access to a
large provider network just because your discount card displays the
network’s name and logo. If you plan to use a specific listed
doctor, hospital, pharmacy or other provider, ask a few questions
before you sign up.

Discount Plans vs. Health Insurance

DISCLAIMER: This information is for educational and informational
purposes only. The content is not intended to be a substitute for
professional advice. Always seek the advice of a licensed Insurance
Agent or Broker with any questions you may have regarding any
Insurance Matter.

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One Response to Discount Plans vs. Health Insurance

  1. So true! Here in Ohio, we have quite a few of those pesky “discount plans.” Of course, they’re not worth the paper they’re printed on.

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