Millions of people who don't have health insurance are turning to health discount cards as a way to save money while getting the care they need. They're attracted by the large provider networks, deep discounts and low monthly fees that the discount programs advertise.
"Only $4 a day for a family," reads one company's pitch. "Discounts from 10 percent to 60 percent," reads another.
But government officials and consumer advocates say many people may not know what they're getting for their money. Most important, some consumers may not realize that these cards are not the same as health insurance.
The discount plans are more like coupons, in that they offer discounts on services and products from participating providers and vendors. Users typically pay a monthly or quarterly fee to be part of the discount plan, which is usually much cheaper than health insurance premiums.
But just because you have a discount, it doesn't mean you can actually afford the service. And if you can't get to the doctors who offer the discount, it's of no value either.
So if you're not careful, you could be paying for nothing.
Reputable programs make it clear what they can do for you. Others don't.
"This industry is exploding so fast that it's rife with crooks whose only motive is to separate you from your money through deceptive and outright fraudulent advertising and programs," said James Quiggle, spokesman for the Coalition Against Insurance Fraud, a Washington, D.C., nonprofit watchdog group.
Many companies, Quiggle said, blur the line between discount card programs and insurance by using what he calls weasel words such as "health coverage" and "health benefits" to describe their plans.
More than 28 million people use the discount plans, according to the Consumer Health Alliance, the national trade association for the discount health industry. But Quiggle and others say the cards are getting more popular, given rising unemployment and the skyrocketing cost of health insurance.
"Discount health cards have exploded in the last four to five years because you have 46 million people without health insurance," he said. "That's a huge pool of potential victims."
The cards have also become more accessible than ever. Blue Cross Blue Shield of Florida recently struck a deal to sell two of its cards at more than 1,000 Winn-Dixie and CVS stores across the state. One is a $59 card that can be used toward the purchase of one of the company's health plans. The other is a $19 FamilyBlue card that offers discounts for prescription drugs and dental and vision services.
The $19 FamilyBlue card covers an entire family and is good for three months. Its brochure estimates that cardholders can save $34 on one dental cleaning, $38 on eyeglasses and $72 on prescription generic high blood pressure medication.
Blue Cross Blue Shield spokesman Paul Kluding said the cards could be attractive options for people who are uninsured, or people who have medical insurance but not vision or dental coverage.
"However, we are aware that some insured customers are purchasing the cards to use as a gift for family and friends," he said.
Recognizing the growth of the discount health card industry, and the complaints consumers were filing, the state Legislature in 2004 adopted regulations that companies must follow.
Discount medical plan organizations must be licensed by the state Office of Insurance Regulation and must disclose prominently that the plans they offer are not insurance. Currently, 41 companies are licensed by the state to sell discount plans.
Quiggle says established insurers like Blue Cross Blue Shield are more likely to deliver as promised, but there are also legitimate companies that aren't big-name insurers, he said.
The key, he said, is doing your homework before you buy. He suggests consumers call doctors on the discount plan's provider list to make sure they're part of the plan and willing to give the promised discounts. He says consumers also should read the fine print — some plans include hidden fees that could erode any discounts.
The state Department of Financial Services, which fields complaints from consumers about discount medical plans, includes a list of warning signs of possible fraudulent plans on its Web site.
Among them: "If it sounds too good to be true, it probably is!"
Richard Martin can be reached at [email protected] or (727) 893-8330