HEALTH ACCESS UPDATE
Friday, February 19, 2010
DMHC PROPOSES REGULATION ON SO-CALLED “DISCOUNT HEALTH PLANS”
* CA Department of Managed Health Care cracks down on wild west of unlicensed products
* Discount health plans are not health insurance, but some pay premiums thinking they are.
* Many provide less benefit than a pizza coupon: illusory discounts with phantom providers
* Health Access argues in favor of real discounts, real networks, and real notices
* DMHC HEARING on new consumer protections: MONDAY, February 22nd, in Oakland
The California Department of Managed Health Care has now embarked on the formal process to regulate so-called “discount health plans.” This will begin with a public hearing at the Elihu Harris State Building, 1515 Clay Street in Oakland at 11:30 am on Monday, February 22, 2010 and it is expected that industry representatives, advocates, and consumers will all give testimony on this regulation. The specific language can be seen at DMHC’s website at http://www.dmhc.ca.gov/. Interested persons or organizations may also submit written comments to the Department on their website by 5:00 pm on Monday, February 22.
The Department has reacted to many industry abuses where so-called discount health plans marketed a discount health card as real, comprehensive health insurance—which it is not. Some of the documented abuses are:
* Consumers are charged high fees and co-payments by discount health plans ($25 to over $1000 per month) which are of questionable value for that money
* Discount health plans advertise what turns out to be a phantom network of doctors, hospitals, and clinics that allegedly offer discounts to cardholders. However, these providers often are unaware they are part of discount health network and are reluctant to provide services.
* Consumers pay a monthly premium for a discount health card that is billed as a dollar deduction or “percentage off”—but is often no more than or even as great as other discounts commonly given to consumers for free, such as AAA, religious groups, or fraternal organizations.
* In most cases in health care, the value of the discount is illusory because there’s no set price of the service to begin with. Many “billed charges” for doctor and hospital care are multiple times what insurers and government programs pay, so a discount off that “sticker price” is still inflated.
* However, the most insidious impact on these consumers is that they believe they have purchased true health insurance that provides some peace of mind; however, they find they are spending good money for a largely worthless product.
DMHC has undertaken to put discount health plans through a rigorous licensing process to establish requirements and test screening and oversight guidelines to separate what may be legitimate businesses from outright fraud artists. They have, for example,
· Prohibited from marketing as health insurance
· Required the discount health plan to maintain a public website with a complete and accurate directory of all providers by specialty and geographic location
· Required plans to provide a toll-free customer assistance call center number and disclose availability of interpretation services for languages other than English where calls must be answered within 5 minutes
· Required to offer bona fide discounts tied to the established Medicare fee schedule
Health Access has previously supplied significant policy guidance to the Department in drafting the language of this regulation. Consequently, with some changes, consumer advocates generally support the language in this version of the regulation.
Health Access and many of consumer allies will be present at the upcoming public hearing to support the Department’s strong language to rein in the most egregious abuses in this industry. ORGANIZATIONS AND INDIVIDUALS ARE INVITED TO JOIN US IN SUPPORT OF THE REGULATIONS AT THE MONDAY FEB 22nd OAKLAND HEARING.
If you have questions, or need further information, please contact Elizabeth Abbott at Health Access at (916) 497-0923 or via email at firstname.lastname@example.org.