Lawsuits have been Filed in Florida and Texas accusing the discount health Card Benefits Association of misleading consumers into thinking its discount plans are health insurance.
A rising tide of complaints across the US about fraud by discount health card companies has prompted action by dozens of other states. 20 states require companies that offer discount health cards to state that discount plans aren't health insurance coverage.
FLY-BY-NIGHT HUSTLERS
Poll results by the Florida Policy Project show as many as 17% of the U.S.'s 40 million temporary and part-time workers -- 7 million people -- say they have health insurance when they actually only have discount health cards.
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Ranks of the uninsured Explodes beyond the previously reported figure of 46 million reported by the Census Bureau. The pollsters first asked a sample of nonstandard workers if they had health insurance coverage. It turned out that many had these faulty discount health insurance cards.
Valid savings are Offered by many card companies on services such as doctors' visits and prescription medicines, but because they typically aren't selling health insurance coverage, they're usually not regulated by state insurance commissioners, creating an opening for faulty coverage
Some patients get Hit by outright fraud. That happened to Tina when the 32-year-old resident of Houston, Texas, got pregnant. She paid $289 for what she was told was health insurance to a Dallas company that has since disconnected its phone.
Her doctor would Not accept the discount card. John Morrison, assistant state auditor for Texas, which cracked down on discount plans last year exclaimed: "There are a lot of illegal discount health card plans advertising in misleading ways."
PRICE RELIEF
Many discount health cardholders buy their discount cards from more legitimate players, which can provide a much-needed service. In the past decade or so, soaring medical care inflation has prompted the insured and uninsured alike to seek price relief.
Discount health card companies can negotiate group discounts of 10% to 30% for individuals, who often can't get the lower prices traditional health insurers squeeze out of health providers. Some medical providers sign on to get new patients.
A big Number of Americans have snapped up as many as 20 million discount health cards, estimates Vince Wagner, CEO of San Antonio-based Southwest Discount Health Corp.(SDH). SDH alone has 4.5 million discount health cardholders, Wagner says.
The Only in-depth Examination of the industry thus far turned up a raft of similar problems. Last year researchers at University of Texas at Austin Health Policy Institute purchased 5 discount health cards available in the Austin area. They called 44 medical providers listed as members of the discount health cards' networks.
The result: Only 16 honored the medical card, and only 9 would give an estimated discount prior to performing the service. Only 1 discount health card listed providers that all offered discounts.
Discounts varied from 4% to 36%, much less than the 80% promised by two discount health cards. In some cases providers told the University of Texas researchers they offered similar or even greater discounts to uninsured consumers without discount health cards.
State governments cracking down on the bad apples, could end up helping the uninsured. Ohio Deputy Insurance Commissioner, Rich Tuborg, is leading the charge to convince his state and others to begin regulations that all states could adopt, which would be a first step in addressing a growing national problem.
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