Health Insurance Articles

What Are Discount Health Plans And Do They Provide Enough Coverage

2010-01-03

With the price of health insurance on an ever-increasing upward slope, many people are attempting to find cost-effective ways of maintaining adequate health care without breaking the bank. One such option that has sprung up in recent years is the discount health care plan. These plans often have the benefit of a very low monthly fee and will claim to provide the client with deep discounts from major medical corporations, as well as reduced prices on medical necessities.

It is important to understand the difference between typical health insurance coverage and the discount option. Typical health insurance, while expensive, will cover the client in almost any circumstance, whether it be a hospital visit, check-up or serious surgery. A discount plan, meanwhile, charges the client a fee to have access to a list of providers who will offer reduced-cost services. These fees are often at the same rate as an insurance company would pay, which on the surface appears to be a substantial discount. These programs can often cost as little as $30 per month.

While the up-front savings of a discount health care plan can be attractive, there are a few important factors to consider. First, a discount plan will not cover a hospital stay or the treatment of a client suffering a debilitating illness - those would be covered under a traditional plan, but would not be on the "list" provided in a discount arrangement. Also, it's important to consider the kind of services that are offered at a discount and exactly what type of fees will be paid for the use of these services. For example, if a discount plan states that a particular testing lab can be used at a lower cost, call the lab. Ask them what kind of price they offer. Also, ask both the insurance provider and the service provider if there are any administrative fees involved. Often, what appears to be an excellent deal on the surface will end up costing just as much as traditional insurance once all of the administrative and hidden fees are tallied.

It can also be worthwhile to contact the insurance commissioner in the state the discount plan is being sold from to confirm if they are permitted to sell insurance at all. If they are not, what they will be providing is simply a discount card which will not protect the user in the long term, and may not even live up to the its promised discounts. If the discount health provider is legitimate and the client is in good health and merely cash-strapped, a discount option can be a viable alternative, but great care must be taken before the decision to abandon traditional health insurance is made.