CA shuts down down two unlicensed discount cards, unlicensed plan

In a move that should be the first of many cracking down on questionable health coverage schemes, the California Department of Managed Health Care has ordered two unlicensed companies offering "discount cards" to shut down, while demanding that a third plan selling purported health insurance apply for a license or close its doors.

The DMHC is throwing the book at International Association of Benefits and Prudent Choice discount plans, both of which have received cease and desist orders; must seek a license and file an application by Sept. 15 or face the same.

Along with closing these plans--which have left some consumers with thousands of dollars in bills who thought they were covered--the state is asking hospitals, doctors and clinics to have intake workers report when patients appear with those cards and expect to be covered.

The agency estimates that between 150 and 300 of these companies are operating in the state, defrauding tens of thousands of lower-income, non-English-speaking minorities working in small businesses. These companies typically claim high discounts for care with risk-free cancellation policies, and use deceptive advertising, according to the DMHC.

To learn more about this issue:
- read this Health Leaders Media piece

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