In the wake of several lawsuits and fraud complaints, California's Department of Managed Healthcare plans to begin issuing licenses for health discount cards. In instituting the new rules, California joins 25 other states which regulate discount plans. The cards, which are held by an estimated 6 million state residents, are typically used by consumers without health insurance to obtain discounts--more or less equivalent to the discounts insurers receive--on fees for dental and medical care. In recent times, however, companies offering the cards have been accused of making exaggerated or false claims as to the benefits provided by these cards, which typically come for an annual fee of less than $100. In the future, companies that want to sell health discount cards will need to prove that they're offering a real discount--and make full disclosure to the DMHC regarding their operations--before they can get a license. A San Diego-based dental discount provider Dental Club has become the first discount card to be licensed under the new requirements.
To get more background on the health discount card:
- read this piece in the Los Angeles Times
The FTC recently fined a Canadian telemarketing firm $200,000 for marketing bogus discount card plans to U.S. seniors. Article