Recently we recognized “Cover the Uninsured Week,” a national effort highlighting the fact that more than 47 million consumers across the country, including millions of Californians, do not have any health insurance. While the reasons vary as to why people aren’t covered at all, we know that healthcare costs continue to rise while the economy continues its downturn.
As a result, it’s getting more difficult and expensive for hard-working people to buy health insurance. State governments, including California, are discussing ways to expand health insurance coverage. However, with the exception of Massachusetts, no state has been able to pass a comprehensive plan to provide universal coverage for basic health services. In addition, the marketplace offers limited or no coverage for ancillary services like dental, vision, hearing and chiropractic.
In the meantime, many prominent associations, employers, insurers, non-profits, and unions are providing alternatives for their members and employees who do not have coverage–either at all or for particular services–and who can’t or don’t want to pay full-price for those services. One alternative that makes non-covered health care services more affordable is discount healthcare programs (DHPs).
DHPs have operated in California for more than 20 years and are made available by some very familiar entities, including AAA, AARP, AFL-CIO, AFSCME, AIG, American Federation of Government Employees, American Federation of Teachers, Bank of America, Citibank, SEIU, UFCW, United Farm Workers, UnitedHealth, VFW, and Wachovia.
These entities provide access to DHPs because they recognize the value that discount programs provide to their members, customers and employees. DHPs increase access to healthcare for the underinsured and uninsured by providing consumers the ability to directly purchase non-covered healthcare services and related products at prices discounted below providers’ usual retail charges, usually through low-cost month-to-month memberships. Discounts typically range from 10-50%, depending upon the service and the provider. Discounted services typically include those not covered by insurance plans: dental, vision, prescription drugs, hearing, and chiropractic services. DHPs that are limited to these services account for over 90% of all DHP memberships, although some DHPs also offer access to discounts on physician and hospital services. DHPs must make clear to consumers that they are NOT insurance and the consumer is responsible for paying the provider directly for all services rendered.
The Consumer Health Alliance (CHA) is the national trade association of the discount healthcare industry. DHPs operated by CHA member companies serve over 45 million consumers across the country, including more than 6 million Californians. With such significant membership and consumer interest in DHPs, and with evidence that some bad actors have entered the market, CHA member companies understand the importance of enacting state laws that establish appropriate levels of consumer protection and program integrity.
In recent years, CHA has worked with the National Association of Insurance Commissioners to adopt a model state law, and with more than 25 states to enact specific state laws governing the industry. CHA’s own stringent Code of Conduct has been the basis for many of these state laws. While states have taken different approaches as to how to regulate the industry, states enacting these laws have had the same positive experience: the bad actors leave and the legitimate programs stay. As a result, the level of complaints regarding legitimate programs is very low.
Similar legislation to protect California consumers from fraudulent companies is long overdue. Over the past nine years, CHA has worked with prominent California legislators in an effort to enact legislation that would regulate the industry. This year, we sponsored legislation that would have established the most rigorous regulatory system for DHPs in the country and provided the Department of Managed Health Care clear authority to regulate DHPs. Sadly, that effort has stalled.
CHA recognizes that DHPs aren’t the solution to the healthcare crisis, nor are they intended to replace insurance. While policymakers continue to work to make coverage more available, there are millions without insurance, with inadequate insurance, or needing services for which insurance isn’t available. Because these people must pay for their own care, they can use DHPs to reduce their costs. Judging by the large and growing number of satisfied California consumers who continue to belong to and use DHPs month after month, we are proud to be a health care option that works.