Discount Health Plans

There is one general rule that you can follow to determine if a discount plan will work with someone's medical insurance: No double dipping of "discounts". You need to ask the question "is the doctor giving a reduced rate to someone when billing the patient or insurance company?" The answer will tell you whether the program will work or not. For example, if the doctor is getting paid what he bills, a discount plan will work well. On the other hand, if the doctor is getting paid less than he billed, he is part of a network and is already giving a reduced rate. In this instance, the member cannot use a discount plan to receive a further reduction. If a member pays a co pay, such as $10 or $20, the doctor is in a PPO or HMO network and is already accepting a reduced rate.

Discount plans can work with a high deductible insurance policy, even when there is a PPO network attached to the policy. The reason is that the doctor's office generally calls the insurance company to find out what deductible you have and how much of it has been used. If you have a high deductible and aren't close to meeting the deductible, the doctor's office will generally bill you at the normal rate and ask you to pay that bill in full at the time of service. The insurance company is often not set up to reprice the bill for the doctor's office over the phone, so you may end up paying full price. If, however, you have a discount plan, you simply use the program until you meet the deductible, and you'll receive the best price immediately.

Discount plans can also work with most indemnity plans (see link below for actual example). This type of insurance pays a set amount when the patient has a hospital stay or surgery. For example, it might pay $500 for each day a person is in the hospital. A discount plan is a great complement to this type of plan because it stretches your dollars further. For example, if the hospital stay cost $3600 per day, an indemnity policy might pay $500 per day, so the member would still be liable for $3100 per day. Using a discount plan, at a per diem hospital, the cost could be reduced to as little as $1000 per day. After applying the insurance payment, the patient would only responsible for $500 per day.

Similar to the indemnity plans are the disease specific insurance plans that pay a set amount if you contract that disease. The most common of these today is the cancer policy; that may pay $5,000 or more if you are diagnosed with cancer. Again, the patient is responsible for billed charges, reduced by the insurance payment, and a discount plan is a good complement to reduce those charges.

The American public has been pushed over the years to believe that they need full health insurance coverage that will cover almost anything, even a routine office visit. The cost can be in excess of $600 per month, even for a healthy family. How many people really spend that kind of money on their healthcare? We don't carry auto insurance that covers oil changes, tires, and new spark plugs. It would be far too expensive. But, that’s the approach we normally take with health insurance. What are our options? The average healthy individual requires hospitalization only once every 20 years. But, they carry a high cost insurance policy because they are afraid of that occurrence. Following is an example of how someone might rethink their insurance coverage and use a discount program to save thousands of dollars over the course of a few years.

Assumptions: A typical family of four has an 80/20 health insurance policy with a $500. deductible that costs $450 per month. The family is relatively healthy and currently has no serious diseases. The family has 6 visits to the doctor each year, at an average cost of $100 each. Since no member of the family has met the deductible, these visits are fully paid by the family. Total annual cost is $5,400 for insurance, and $600 out of pocket costs for a total of $6,000.

Restructuring the Risk: If the family changed their insurance policy to a high deductible (say $2,000) they might reduce their insurance costs to around $200 per month. Adding a discount program at $30-$60 per month could bring their total cost to $2760-$3120 per year. Out of pocket costs were reduced to $400 per year (as an example), thus total costs are now only $3,160-$3520 per year.

The Result - A potential savings of between $2480-$2840 per year. This is more than enough to cover the deductible, if required, in less than one year. Think of how much money you could save over the course of five'' or ten years if you saved this money and invested it wisely.

In Summary: The preceding examples are hypothetical and are not a guarantee of actual savings. The member should always confirm with their local provider their specific guidelines on accepting discount programs. These are programs of choice, access, savings, and responsibility. They provide assurance not insurance. The programs provide choice of providers without the red tape of having a third party looking over your shoulder to decide what services you can receive. They provide access to some of the best providers in the industry, at savings generally ranging from 15% to 80%. And, they require the responsibility on the part of the member to pay the providers (at the reduced rate) at the time of service. We often refer to it as self-managed care when discussing the program because you are in charge of your healthcare regime. The primary purposes of these plans are to provide assistance to those with no or little insurance coverage and to supplement traditional insurance. Many procedures and medications are excluded from traditional insurance programs. Discount plans are an excellent way to fill the “gap”.

Using Discount Plans with Medicare

If you are covered by Medicare and are going to a doctor or other medical provider who accepts Medicare assignment, you are already receiving discounted rates, and cannot receive another discount using a discount card. You may, however use the card when receiving services from a medical provider who does not accept Medicare assignment. The discount card program does, however, offer savings on several medical needs not covered by Medicare, including: hearing aids, prescription drugs, chiropractic services, dentists, long term care and eyeglasses. The health hotline, staffed by registered nurses is another great asset for those people who are on Medicare.

Rules of Thumb

Discount cards can save money for many healthcare consumers even if they have insurance. Additional examples of how discount cards works with insurance follow:

Discount Plans and Health Insurance