California crack down on discount health plans

Cindy Ehnes, director of the state Department of Managed Healthcare, wrote an article in Capitol Weekly describing how California will be cracking down on fraudulent discount health plans. California will be posing new regulations to license company’s, imposing strict consumer protections for those wishing to sell their discount plans in California. The department issued an alert, warning Californians of deceptive discount health plans and suggesting questions to ask. The alert is available in English and Spanish at In 2007 the DMHC received more than 200 consumer complaints about discount health plans, almost one third of which were because the consumer believed the discount plan to be insurance. “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” she said.

A discount health plan is not health insurance. A “discount plan” is provided by organizations that arrange discounts for medical services, often issuing a card to you for that purpose. And the providers are not obligated to accept the discount plan, so not all doctors and facilities participate. Be very cautious and thoroughly research any discount health plan you are considering.

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