Discount medical cards

Discount cards have spread recently as a low-cost way to get needed medical care. But many discount cards also are fraudulent.

Here’s how honest cards generally work: Consumers typically pay a monthly fee. Plan members gain access to a large pool of primary physicians, eye doctors, pediatricians and other providers. Plan members pay the medical costs themselves, but at a discounted price.

Many discount medical cards offer legitimate, money-saving benefits. But many cards lie about benefits that don’t exist, grossly inflate the potential discounts, and impose hidden fees that can wipe out your savings. The system is rife with fraudulent or misleading discount card providers.

• The scams

• The price you pay

• Fight back

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The scams

Pretend insurance. Discount medical plans aren’t health insurance. But their ads use insurance-like terms such as “health benefits” and “protection.” People are conned into signing up, trusting they have real health coverage.

Bogus provider list. Shady plans lie that they have large networks of medical providers willing to provide discounted services. Often the providers don’t even know their names are falsely on the list. Thus they’re unlikely to provide the advertised discounts when plan members call.

Hidden fees. Added fees are stashed in the fine print of your contract.

Fake plan. Sometimes the discount plan is totally fake, offers no services or discounts, and has no intention of making good on its promises. The plan exists only to fool people into paying fees that line the pockets of the sham operation’s masterminds.

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The price you pay

Lose your health coverage. You could give up your current health coverage, mistakenly believing you found a better insurance deal. In fact, you’ll have no health coverage and have to pay large medical bills out of your own pockets. Imagine arriving sick or injured at the hospital or doctor’s office, then presenting your discount card only to find you have no health insurance.

You’re saddled with large medical bills. You’ll have to pay medical bills yourself if you’re fooled into believing you have real insurance.

The promised discounts may not exist, or may be exaggerated. Hidden administrative fees and other hidden costs can eat up your discounts. In the end, you may have to pay more money than you thought.

Your health care may be compromised. The medical providers and treatments the cards promise you may not exist.

Your money, identity and financial information could be stolen. At least one company obtained the credit card and checking account numbers of consumers when it tried to sell them discount cards over the phone, and then billed their credit cards unauthorized charges even when consumers declined the cards, the U.S. Federal Trade Commission alleges.

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Fight back

Ask the right questions before signing up…

Insurance or discount? Know the difference between health insurance and a discount card. Ask whether the card is insurance that covers your treatment, or is a discount card that still requires you to pay all bills yourself.

Slippery sales pitches. Be wary of slippery sales pitches. Here are several warning signals…

• “Save up to 60 percent on healthcare” The term “up to” is meaningless.

• “Affordable health coverage” Calling it coverage could deceive you into thinking you have real insurance.

• “Guaranteed” benefits. Could sound like insurance, and not all cards can deliver on their promises anyway (see below)

• “Longterm care” discounts. Do not mistake this for true longterm health insurance.

• Fine print. Make sure the fine print agrees with the promises in the sales pitches.

• Your treatments? Does the card offer discounts on the medicine and treatments you need? Find out exactly what medical conditions, medicine, treatments and other services are included. Even if your medicines are discounted, check to see whether generic drugs are cheaper.

• Clearly listed? Are prices clearly listed? Do they offer a clear discount over what you now pay?

• Hidden fees. Are large administrative fees hidden in the fine print? They can quickly eat up your discounts. Especially, watch for fees charged for each use of your discount card.

• Evasive pitches. Be wary if the telemarketer or other sales person seems evasive, ill-informed or is reluctant to provide you detailed material about the card. Ask specific questions, and demand specific answers.

• Credit card fraud. Avoid giving your credit card and checking account numbers to strangers selling discount cards over the phone or the Internet. Fees for the card, for example, might be charged to your credit card even if you didn’t sign up.

• Refundable? Know whether your membership fee is refundable if you cancel, whether you can cancel at any time, and the procedures for canceling.

• Contact authorities. Contact your state insurance department and Better Business Bureau if you suspect a scam. Your insurance department may not regulate the cards, but can help refer suspected fraud to the right authorities.