Fake health plans prey on the vulnerable

Thursday, June 04, 2009

In an economic climate where people are being laid off and losing their health insurance, CNN is reporting that health care scams are on the rise. A common scam involves signing up for a medical "discount card," usually for a monthly fee, that offers reduced rates for doctor visits, hospital stays, prescription drugs, and other treatments. These fake programs bill themselves as a cheaper alternative to purchasing health insurance.

But when patients show up the get medical treatment, providers have never heard of the program, the cards are worthless, and consumers are out several hundred dollars that they don't have to spare.

There are legitimate health discount cards. They may offer lower prices to consumers for some services, at least where the cards are accepted, but they are not insurance. You still must pay the medical bills yourself.

Avoiding Rip Offs

According to CNN and the National Association of Insurance Commissioners, you should be wary about the program if:


• The program won't give you a list of which providers it works with or the prices you'll pay until you sign up (and of course pay their fees).


• You are introduced to the program from a spam email or online pop-up advertisement..


• The program uses terms like "guaranteed coverage" and "affordable health coverage" to fool you into thinking it's similar to health insurance.


• A sales person seems evasive or won't give you detailed information about the card or program.


The Federal Trade Commission and at least eight states have taken action against more than two dozen health cards for offering fake discounts services. Contact your state insurance department or Better Business Bureau to report fraudulent activity.

The Coalition Against Consumer Fraud offers useful tips to help consumers navigate health discount cards.

Also, visit Consumer Health Alliance, a group that represents companies that sell these types of cards, to learn more about legitimate offers and download their consumer guide to shopping for health care discount programs.


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