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Special Feature: New Scam Warning: Discount Medical Cards

Started by bamalli, July 27, 2009, 08:44:35 PM

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bamalli

Special Feature: New Scam Warning: Discount Medical Cards

With the soaring cost of healthcare, every opportunity to save money may help, so it's no surprise that many people turn to medical discount cards as a way of cutting their bills.

And it's a great idea -- providing you save more than you pay out for the card.

Discount medical cards work by offering users significant savings on medical, dental, optical or pharmacy bills.

Legitimate firms that offer these cards first negotiate savings with providers, then sell the cards, usually for a monthly fee, to the general public.

Providers make their money through the increased level of business the cards drive to their pharmacies and clinics. The card providers profit from the sale of the cards. And the users save by cutting their costs.

So it should be a win-win-win situation. But not always.

Sadly, in some cases, the cards are just a scam -- as a couple dozen Montanans recently discovered when they found the cards they paid good money for were utterly worthless.

The company they bought them from did not have contracts for discounts with the healthcare providers they claimed to be working with.

In other cases, sellers -- usually operating via telemarketing -- deliberately mislead customers into thinking they are buying cheap health insurance, when they are not. Discount medical cards are distinctly different.

This is dangerous because, in some cases, victims, believing they have found a good cut-price deal, give up their existing health insurance.

Later, when they discover the con, it is either more expensive or even impossible to regain their previous coverage. Plus, they may be lumbered with medical bills they'd thought were covered.

If you're offered or are considering buying a discount medical card, here are the steps you should take to ensure you know what you're buying:

* Be skeptical of any firm that promises the same kind of healthcare coverage you can buy elsewhere but at a massively reduced cost.

* Seek written information on what is covered and what is not, and specifically on whether medical treatment is covered and, if so, what types of treatment are included or excluded. In other words, get it in writing!

* Ensure the service providers are named and that they are the ones you want or can use.

* Do your homework on whether the scale of any savings you will make -- on meds for instance -- will be offset by the fee you pay for the card.

* Check out the card provider online. If it is a scam, someone else will likely have reported it.

* Are there conditions in the fine print that will let the provider off the hook if things turn sour? Or are there additional fees you have to pay to get a particular product or service?

It is worth noting that a number of American states offer their own discount cards -- totally free. To see if yours does or to check out the credentials of someone you are thinking of working with, contact your state insurance department. Find them here.