email from Iowa Policy Project on Medical Discount Plans (warning)

[rurallib]

I love those folks at Iowa Policy Project. They actually look at the real effects of issues on real families.
I hope it is OK to copy over the email. Very important warning for all. The snakes have found another way to exploit the confusion surrounding health care: (I recommend everyone stop by there for their thorough research.)


Discount Medical Plans: Not Your Father's Health Insurance
Plans Promise Much, But Offer Slim Hopes of Payoff for Consumers

IOWA CITY, Iowa (December 16, 2010) — Discount medical plans emerging in an increasingly expensive and confusing health-care market are creating a "legion of problems" in a sprawling and unevenly regulated industry, an Iowa researcher reported today.

"Discount cards for health-care costs are no substitute for conventional health insurance coverage," said Colin Gordon, senior research consultant for the nonpartisan Iowa Policy Project (IPP) and author of a new report, "Not Your Father's Health Insurance." "In some cases, states are stepping in to protect consumers."

Gordon's report said discount medical plans — one of many products promising health coverage or security as job-based insurance has eroded and more Americans are uninsured or underinsured — make it difficult for consumers to understand what value they actually offer. But he said discount plans typically carry high deductibles that "make little difference" in reducing costs, while leaving high-cost procedures out of reach.

"Because they offer little benefit for those with light medical expenses and no security for those with substantial expenses, the likelihood that discount medical plans 'pay off' for health consumers is slim," Gordon said.

With health reform, Gordon said, the future of discount plans is unclear. But the plans present serious problems, including:
— aggressive, deceptive marketing practices that suggest or imply conventional insurance coverage, or exaggerate savings or discounts;
— sweeping claims of access to “participating providers,” but often no clear agreement for listed providers to honor the plan's terms; and
— elusive benefits — given plan costs and provider participation — for most plan members.

“And in some cases, discount plans are re-packaged and re-priced by third-party brokers, which makes these problems more difficult," Gordon said. "In some casesThese problems are especially pronounced at the industry’s margins — where discount plans are re-packaged and re-priced by third-party brokers.

Gordon said 30 states have laws on the books to protect consumers from abuses by discount medical plan organizations. Some provisions in selected states:
— disclosure in marketing materials to state that plans are "not insurance";
— registration of plans with state insurance regulators; and
— disclosure of agreements with providers, provider networks and third-party marketers.

In addition, Gordon said, some states require cancellation rights, an assurance of financial security by the organization, and annual reporting.

With many states, Gordon said, enforcement of the provisions on the books depends on the initiative of state insurance regulators or attorneys general.

The full report is available on the IPP website http://www.iowapolicyproject.org. The Iowa Policy Project is a nonprofit, nonpartisan public policy research and analysis organization in Iowa City.

"Not Your Father's Health Insurance" was funded fully as the first of four reports being produced by the Iowa Policy Project as part of a $335,043 contract with the U.S. Department of Labor Employment and Training Administration for research on employment and training costs of uninsurance and the impact on contingent workers.