The discount health card has become increasingly popular with the increase in healthcare premiums and people looking for more affordable health insurance. It is crucial that people know the difference between the discount health card and health insurance. Discount health cards are not insurance. How do you distinguish between legitimate and fraudulent discount cards?

You can get discounts on services from doctors, pharmacists, etc.who accept these cards as long as they are legitimate. Here are some tips from National Association of Insurance Commissioners.

1. Buyers Beware!

Unlike insurance, the discount card companies are not regulated by the state insurance departments. There are fewer consumer protections for buyers. Some insurance departments have recently enacted legislation to allow regulation, including licensing or registration requirements.

2. Double-check the Company and Agent

Discount cards  are offered by some insurance carriers for at little or no cost as an added value to their members. There are also certain associations, banks, employers and others that also provide discount cards. Problem is that there is the potential for confusion and fraud with respect to discount cards.

Be careful with salespeople and advertisements that use words like “co-payments” or “premiums” to deceive consumers into thinking a discount plan is insurance. A discount plan is NOT insurance.

Avoid sales personnel or companies that start insisting on debit or credit card information and pressure you for quick decisions. Check with them if it is a discount plan or an insurance plan. Follow up with contacting your state Attorney General and the Better Business Bureau to see if any complaints have been made against the entity.

3. Check the Benefits

Deceptive discount health card issuers may claim that their product is insurance, but discount cards do not pay medical claims. Rather, enrollees are actually responsible for paying for services at the time care is received.

Some of these discount plans may exaggerate on savings potential and promise discounts that may not be available. In addition, they may not cover all types of insurance or conditions.

Make sure that your needs are met by checking that there is a provider in its network that can do it. Follow up directly with the provider that the plan is accepted.

Ensure that there is a toll-free number for customer service, a reasonable procedure for handling complaints and a clear cancellation and refund policy.

4. Discount Card “Red Flags”

Listed below are some warnings against possible fraudulent plans:

- The discount plans are often advertised through blast faxes, spam e-mails, Internet pop-ups or signs posted on telephone poles.
- The company claims you can save a considerable amount on health insurance.
- The company or agent will not give you a list of providers until after you purchase the discount card.
- The company uses high-pressure marketing and an extreme sense of urgency, telling you that you “must act now” or “this one-time offer.”
- You are asked for debit or credit card information or a large up-front fee. Legitimate discount cards will not mandate large application fees or up-front costs.
• Legitimate discount card issuers will state on all their marketing material “This is not insurance.”
• Legitimate discount card issuers will never suggest you drop your health insurance.
• If it seems too good to be true, it probably is!

5. Get More Information

Get a basic understanding of the differences between health insurance and discount health cards.