Fake Plans

One of the bills Health Access is watching that’s up in Senate Health Committee this week is SB1603 (Calderon), which would authorize the state to license and regulate so-called discount health cards.

We question the very existence of these things. Not only do they annoyingly clog up the fax machine (you’ve seen those strange health “insurance” offers), but they rely on consumer naivete to make money.

Their sin is that they’re incredibly deceptive and provide questionable — if any — value to consumers. Discount health plans entice consumers with words like “no pre-authorization,” “no pre-existing condition denial,” and “no waiting period.” They exaggerate their value, promising low prices — discounts of as much as 80% — at a vast “network” of providers.

But often, neither is true. Consumers have no idea what the price for which the “discount” is based on, rendering the discounts essentially meaningless — and often, they could have received the discount anyway if they told the provider they were uninsured.

Mila Kofman, health policy expert formerly of Georgetown University, also tested out some cards and found that nearly three-quarters of providers contacted did not even realize they were part of the “provider” network. Complaints filed against these cards in California show a similar patern.

Kofman’s research also finds that the monthly cost for the identical card can range from $54.95 to $120 because of the pyramid-esque marketing for these products. Cancelling the cards can also be tricky, as many continue to charge a former subscriber’s credit card even after they consumer quit the service.

Sadly, SB1603 would create a way to allow these fake plans to operate legally and continue to bilk consumers.

Boo.

Health Access California promotes quality, affordable health care for all Californians.

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