Is it Insurance or a Discount Plan

How many times have I heard that somebody found a health insurance plan for $69 a month that covers their entire family? Well if it sounds to good to be true, it probably is.

Let me tell you a story. I have a friend who is a lawyer - a smart lady. She told me she had an offer for a health plan, and they only wanted $99 a month to cover herself and her husband - who are both in their 50's. I called the company for her, and asked the operator FIVE TIMES if it was health insurance. The operator avoided the question FIVE TIMES, and finally got annoyed with me. Friends, this is called a discout plan.

WHAT IS THE DIFFERENCE BETWEEN HEALTH INSURANCE AND HEALTH DISCOUNT PLANS?

Insurance will actually come in and pay an agreed-upon percentage of your medical bills. It may have a deductible, copays, maximums, etc. It most certainly will have a waiting period for pre-existing conditions (unless you meet certain conditions). When you apply, you will probably not see anything in the advertising like Guaranteed Acceptance - health insurance will do underwriting.

Discount plans will not step up and pay bills. Health or Dental discount plans usually use a network with pre-negotiated rates for services. You will be expected to pay the bill, but with a discount. That's why it's called a discount plan.

Now, I'm not saying that all health or dental discount plans are bad things. Even for people with insurance, they can help with co-pays, deductibles, pre-existing condition treatment, etc. Actually, most insruance plans these days come with their own discount plan - sometimes called a PPO network - where the participants have already agreed to charge a pre-negotiated fee for services. That helps keep costs down.

Just make sure you understand what you are buying. Read the fine print. As the salesman exactly what you are buying. If they don't want to tell you, or avoid the question, maybe you should spend your money someplace else like my lawyer friend did.