With money tight and the loss of health insurance for many families, there has been major growth in the health services discount cards industry. These cards, for a monthly fee, purport to pass along savings to consumers for items such as dental, vision, physician visits, labs, and imaging services. They claim HUGE, HUGE, HUGE discounts off the contracted service providers fee schedule.
In most instances, this claim is more rancid than sun baked baloney. These cards are advertising in reverse. Instead of the service providers paying to advertise, the consumers are paying to see a Special list of providers. Supposedly, these dentists, optometrist, and physicians are going to give you an extra discount off of their prices. 75% off a price inflated by 200% is no bargain.
Some cards do have some real value tucked inside. More often than not, you can get the same benefit for less money somewhere else. The time it takes to determine which benefit is bogus and which is legitimate versus the costs virtually nullifies any value these cards may present to the general public.
Health industry providers do have special contracted rates with insurance companies. You can get close, if not better pricing, by flashing green money at the time of service. Providers cut deals with insurance companies to:
- Get a steady stream of patients, lowering their marketing costs.
- Get paid in a timely manner.
The discount card industry will tell you the cards are not insurance, but it is usually in the fine print. My local newspaper did a gushing review of a dental discount card recently. For $79 a year ($6.58 per month) you can get a particular dental discount card. Heck, for $168 a year ($14 per month) I can get you Dental HMO plan that offers:
- $5 office visits
- Initial exam, no charge.
- Yearly x-rays, no charge.
- Twice yearly cleanings, no charge.
- Amalgam surface filling, no charge after 6 months.
- A complete list of all procedures costs and copays.
***Full disclosure: I would make 5 to 10 times more selling the discount card than I would a traditional insurance plan, even though the insurance plan costs more! But I don’t sell discount cards because that sale is only slightly more honorable than purse snatching.***
Certainly, the extra $90 per year for the dental insurance is recovered with the yearly services the plan provides. The review of this particular discount card was done in the business section of the newspaper where I expect a little more critical analysis, just not a regurgitation of the press release submitted by the discount card company.
A better investment for your $79 would be to invest in the company directly. If their marketing is successful and they suck enough people into it, they will make money hand over fist on these discount cards. What are their costs? They certainly are not reimbursing the dentists, like real insurance companies do. Their big cost is marketing on the internet and whatever they pay for item placement advertising in newspapers.
If you do not have dental insurance and can’t afford it, I won’t sell it to you. But if you need some dental work, I can provide you with the negotiated fee schedule included with most dental insurance plans. Take the fee schedule and your cash into your local dentist and start negotiating. You will get good pricing without having to buy a discount card.
Money talks…cards full of B.S. walk.
- 71Additional information can be found about the changes to the standard benefit at Covered California 2014 versus 2015 health benefits comparison. In-Network Standard Benefit Plan Design Comparison Items in red are a change from 2014 Bronze 2014 2015 Ind. Med. Deductible $5,000 $5,000 Rx Deductible1 N/A N/A Family Deductible $10,000 $10,000 Primary Care Visit2 $60 $60…