Discount and Health Savings Plans
What is the Difference Between
a Discount Health Program and Health Insurance?
There is one general rule to determine if a discount health program will work with your medical insurance - No double dipping of discounts. Is the doctor giving a reduced rate to someone when billing the patient or insurance company? The answer to that question will tell you whether the discount program will work or not. For example, if the doctor is getting paid what is billed, a discount program will work well. On the other hand, if the doctor is getting paid less than billed, that doctor is part of a network and is already giving a reduced rate. In this instance, a discount plan will not likely provide 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 normally 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 also work with most hospital indemnity insurance plans. 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 you are 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 patient 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 $1000 per month, even for a healthy family. 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. Some health savings plans now provide not only discount services, but also savings based on other factors.
Health Savings Programs
Health savings programs offer a combination of health benefits that are based on discounted rate schedules, repricing services which negotiate medical bills, and free access type services. A repricing service many times will achieve much greater savings than a discounted rate schedule and is not limited to a specific network. You can submit bills from any doctor or hospital. Examples of free access services would be a 24-hour nurseline or a doctor on call benefit. These services, in many cases, will alleviate the need and high cost of a visit to a hospital emergency room. The American Medical Association has found that over 70% of today's Americans go to doctor visits and emergency rooms simply to get prescriptions or antibiotics.
Using Discount Health 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, the prescription drug donut hole, chiropractic services, dentists, long term care, and eyeglasses. The 24-hour nurseline and doctor hotline are helpful services for those on Medicare.
Rules of Thumb
Discount cards can save money for many health care consumers even if they have insurance. Additional examples of how discount cards works with insurance:
- If you have an insurance plan that does not have a PPO or HMO plan connected to it, you may use the discount program to receive network rates on your health care services.
- If you have an insurance program or an HMO for which you pay a flat rate (such as $50.00 every time you visit a doctor, the discount card can not be used to obtain further discounts. If you have this type of a medical plan, you may only use the card for services that are not covered under your policy. Many insurance plans exclude coverage for chiropractic services, physical exams or well-baby care, dermatology or other specialty services, etc. You may use your discount card to receive the network rates on these excluded services.
- If you have an insurance policy that has a large deductible, and a PPO discount does not apply to your deductible, you may use the card to receive reduced rates from the medical provider.
- If you have an insurance plan that requires you to go to a given network of providers and penalizes you for going to a doctor outside that network, you may use the discount card to receive PPO rates outside of that network if your provider is in the network identified on your discount ID card.
- If you have a hospital indemnity plan (limited benefit medical plan) that only covers hospitalization or has a per-diem rate (such as $300.00 per day when hospitalized), or only provides for coverage for certain diseases (such as a cancer policy), you will benefit significantly when using the discount card for all your medical expenses. For an example of how a PPO network can be used in conjunction with a Mini-Med Health Insurance Plan for additional savings.
- If you have an insurance policy that has extensive waiting periods for certain coverage or excludes certain conditions that were "pre-existing" you may use the discount card to receive discounted rates for these non-covered medical services. Since the discount program has no pre-existing condition exclusions or waiting periods, it can be used to save money when being treated during the waiting period or for the excluded condition. A common situation in this category is that of pregnancy. Virtually all insurance policies count pregnancy as a pre-existing condition.
- For detailed information on how prescription drugs are priced and how you may be able to save money, see the prescription savings page.
- You should always confirm with your local provider their specific guidelines on accepting discount programs.
Discount health and savings plans are programs of choice, access, savings, and responsibility. They provide assurance not insurance. Discount programs offer 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 the best providers in the industry at significant savings. Discounts health and savings programs require the responsibility on the part of the consumer to pay the providers (at the reduced rate) at the time of service. This is considered self-managed care when discussing the program because you are in charge of your health care regime. The primary purposes of these programs 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 and health savings programs are an excellent way to fill this gap.
Best Discount Benefits