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Medical discount cards aren't insurance

States are warning consumers about aggressive - and false - sales pitches for medical discount cards.

By Mitch Lipka Jun 12, 2013 6:35PM
Image: Medical doctor (© Corbis/SuperStock)Paying for health insurance can be a costly proposition. So it stands to reason that when you see what looks like a more affordable option it's going to be attractive.

Enter medical discount cards. They're promoted in advertisements and telephone marketing campaigns as having no deductibles or co-pays and give the illusion that having one is the same as having health insurance.

Make no mistake, medical discount cards are not insurance. Several state attorneys general have issued warnings about the sales pitches.

"Many medical discount programs claim that they can offer big savings on doctor’s visits, dental exams or prescriptions, but they fail to make good on those claims," Arkansas Attorney General Dustin McDaniel said. "Consumers should be skeptical of these kinds of promises and should ask for as much information as possible before agreeing to enroll in a discount program."

McDaniel's office won a lawsuit against a Florida company that pitched its product as health insurance when it was actually a discount card without much in the way of discounts. The monthly cost for limited-use card was more than $100. About 80% of those who had signed up for the cards decided to end their membership with six months, his office said. The state was able to get restitution to about 1,000 consumers who had signed up for the cards.

A California man is suing another health discount card issuer after suffering a stroke and learning that his maximum benefit was $4,500. Costs of his medical care exceeded $400,000.

Not all medical discount cards are created equal. Some actually do provide real savings on certain medical expenses and prescription medicines. But even those are still not health insurance, warns the Federal Trade Commission.
The big problem comes when those selling the cards either outright claim the cards are insurance or present them as if they are.  It's important to be sure what exactly you're buying before you actually agree to the terms and, possibly, cancel your existing health insurance.

Here are some suggestions from the attorney general in Arkansas to anyone thinking about signing up for one of these discount cards:
  • Remember that discount programs are not health insurance, even if they claim to be.
  • Get a list of their participating providers and what discounts or services they are offering to those with the card before signing up.
  • If it is difficult to get that information, look elsewhere.
  • Find out about the refund policy.
  • Do the math and make sure that what you spend on the program results in actual savings.
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Jun 13, 2013 5:53PM
You cannot even believe the list they give you.  These companies buy lists from pharmacy benefit managers, then  use it as their own.  As a pharmacist, I find my pharmacy listed on all these type plans even though I have never signed up to participate in any of them.  So be careful if its free or not, ask your provider do they participate before paying anything for the "discount."
Jun 14, 2013 12:50AM

AS another pharmacist, I see that these discount cards actually add a dollar, or two, or twelve, or $22 to the price of your discount, or charge the pharmacy $1, $2, or $10 to fill your prescription with absolutely no discount to you!  When I fill your prescription I am usually only given a $1 dispensing fee and MAYBE a few cents over the cost of the drug.  There is no margin in pharmacy and it has become a loss leader department to get you to buy non pharmacy merchandise.


Many times these discount cards are e-mailed to us on the prescription from your doctor, but your doctor does not know they are being added.  Some middle man that is providing the "E-Script" service is selling ad space on your doctors own prescriptions!  I tell people to throw them away and just call around to find the best price.  Most pharmacies will match a local competitor's price (within 5 miles), or just go to the store with the lowest quoted price. But remember, price, quality, service,... pick 1 or 2 but you can't have all three when the prescription department is cut to bare bones, overworked, and makes NO profit for it's grueling professional effort and liability.  My 2 cents.

Jun 18, 2013 10:26AM
We have a Pharmacy Discount Card called RX Relief which we received in the mail.  My husband is on Medicare and has no "D" Plan.  We have saved 50% on his prescriptions both times that we have used it at our Meijer's Pharmacy (I have the receipts to prove it).  The 50% savings beats the lowest price at Costco.

The downside is that if you have prescription insurance you cannot use the discount.
That's unfortunate because my husband is getting a better discount (so far) that what my group insurance is giving me for prescription coverage through work at a Fortune 500 company.  (I am a Financial Coordinator there.)

This comment is unsolicited.  Just wanted to spread the word that Pharmacy Discount cards, if you are careful.... and I investigated this one before we used it..... can help you save some money.  We have had no telemarketing calls from this company nor solicitation letters even after we used their discount card.

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