Are you uninsured? Unfortunately, you are not alone. In California, out of a total population of nearly 36 million people, 18.4 percent do not have health insurance coverage. Some lost their insurance when they lost their jobs. Others may be working, but their jobs don't provide health insurance benefits. Whatever the reason, finding and keeping health insurance can be difficult.
This week is Cover the Uninsured Week, a national effort to highlight the fact that too many Americans are living without health insurance and to encourage all of us to come together and seek solutions.
We know that reaching the goal of affordable and stable health care for all requires changes in public policy. Governor Schwarzenegger continues to work towards covering everyone regardless of ability to pay or preexisting health conditions. The California Department of Managed Health Care (DMHC), under his leadership, has been working to increase quality, affordable forms of comprehensive health insurance.
In the absence of successful efforts to reform our health system, however, alternatives to health insurance have cropped up in the marketplace. One is a discount health plan — which may not be truly offer a worthwhile discount and may even be fraudulent.
The idea behind a discount health plan is a membership program which offers reduced-rate health care services to the public. These plans typically charge an annual membership fee and a monthly payment in exchange for a list of health care providers who will deliver services to members at a discounted rate. Members must then pay directly for the health services. The discount plan is not insurance; meaning that neither the plan nor any other entity assumes financial risk to pay providers for delivering services. It is more of a pay-as-you go service, but at less cost than the normal fee that an uninsured person would pay.
These plans have historically been largely unregulated, arguing against the DMHC position that they need to be licensed as a health plan. But numerous consumer complaints have been received about plans that appear to be fraudulent, marketing non-existent discounts. In 2007, the DMHC received more than 200 consumer complaints concerning discount health plans, almost one third of which were because the consumer believed the discount plan to be insurance. The average loss to a consumer ranges from several hundred to several thousand dollars. In addition, some companies automatically debit monthly fees from a consumer, making it very difficult to cancel once the card is proven worthless.
Unfortunately, fraudulent discount plans often target lower income, non-English speaking consumers without access to health insurance. These consumers, who already cannot afford the high rates of traditional insurance, are those least able to absorb these additional expenses.
However, the DMHC has worked diligently to shut down fraudulent discount health plans, by ordering certain plans to stop doing business in California. We will soon be proposing new regulations to license companies, imposing strict consumer protections for those wishing to operate in California.
In the past month, we have seen a substantial increase in the number of complaints regarding discount plans, so it would appear that some fraudulent companies may once again be marketing heavily in California. The DMHC is here to help consumers tell if a discount plan is legitimate or not.
We have issued a "Consumer Alert", warning Californians of deceptive discount health plans and offering tips on questions to ask. Some examples are, "Can I have a list of providers that are in the network?" or "Can I get your cancellation policy in writing?" The alert is available in English and Spanish at www.hmohelp.ca.gov. Consumers who have questions can also call the DMHC HMO Help Center at 1-888-HMO-2219.
Cindy Ehnes is the director of the state Department of Managed Health Care