Regulation of Medical Discount Plans

History

• As health costs have risen, more consumers have looked for an affordable alternative to traditional health insurance. Medical discount plans claim to offer appealing options such as low premiums, no deductibles or high discounts. Once these plans are purchased by consumers, though, many medical providers wouldn't accept them or the discounts on prescriptions are so low that the cost of the plan exceeds the discount offered.
  
  

Regulation

• The Federal Trade Commission (FTC) received numerous complaints about different discount plans. In response, the FTC filed lawsuits in numerous states to halt the sale of these plans. State attorneys general and state insurance commissioners also filed lawsuits. The FTC has also published materials to educate consumers about the differences between discount plans and health insurance.
  
  

Warning

• The insurance commissioner in your state can let you know if a given company is licensed to sell insurance. If the company offering a health plan isn't licensed to sell insurance in your state, it may be best to steer clear and save yourself the cost and the trouble of dealing with a discount plan.