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OnlineAdviser forum
Understanding a health plan that includes discounts and insuranceA member asks: I have questions about the health plan called "I have coverage" that is sold by my neighbor. I understand that some of the benefits are provided through a discount plan and some are covered through insurance. But how can I tell them apart? Also, I cannot tell whether the insurance company is licensed in my state. My neighbor is not an insurance agent so I just want to make sure this is legitimate. OnlineAdviser responds:
Health plans that combine PPO discounts with limited
benefit insurance are expanding rapidly and
unfortunately, are often misunderstood by consumers.
When it comes to our health and financial security,
there is no room for buyer confusion. These hybrid health
plan must bend over backwards to communicate the
distinctions clearly to consumers. This is not only a
matter of good business practice, it is also required by
a growing number of state insurance regulations designed
to curb misleading advertising of health plans.
Unfortunately the plan you mentioned does not meet this
standard. As you noted, the insurance company name is
not mentioned in the material you saw and it was not
clear what benefits were insured. Also, the advertising
on the link you provided appears to violate some states'
marketing regulations regarding the use of specific
terminology that distinguishes insurance from discount
plans. For example, a discount plan should not use a
phrase like "covers pre-existing conditions" that is
commonly associated with insurance. Limited benefits insurance underwritten by reputable and highly rated companies like Guarantee Trust Life, Nationwide and United States Fire Insurance Company are available in most states. To see the list available in your state, click on the icon for your state on the Freedom Benefits Home Page. In the end, you will likely find that the best values when you choose the leading benefits in each niche rather than one that tries to blur the distinctions. Columnist Tony Novak answers guest questions in a wide range of consumer finance issues. Health insurance questions and responses are published here to help others with the same issues. Personal information is removed from the question prior to publication. Novak has addressed more than 50,000 consumer finance questions in newspapers, radio television and Internet over a span of 24 years. An expanded biography is published at www.tonynovak.com. Novak is frequently compensated for endorsement of the companies covered in the forum. Advise is from sources believed to be reliable but cannot be guaranteed. OnlineAdviser comments represents the opinion of the adviser only and not represent the position any other person or business. This service is provided without charge on a best-efforts basis. Neither Freedom Benefits nor the adviser assume any liability for the effects of reliance on this advice. Have a Question? Ask OnlineAdviser for a fast professional response. |
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