UNAUTHORIZED HEALTH PLANS AND SHARING PROGRAMS ARE NOT INSURANCE
As the cost of health insurance increases, consumers are finding a confusing
array of choices claiming to meet their healthcare needs. From health discount
plans to programs where all the members share in the cost of medical bills,
consumers need to be certain they know what they are buying.
Health discount plans typically offer a “membership” for the cost of a monthly
fee. Most provide discounts on dental, vision, medical, pharmacy and chiropractic
services. “Sharing” programs usually operate as part of a religious effort and
allow members to share each other’s medical costs on a voluntary basis as part
of an organized program. Unauthorized health plans are selling what looks like
an insurance product but these entities do not have the proper license and are
not following state regulations, which include consumer protection measures.
These plans are not health insurance.
Some things to consider when making health care choices:
- Read all the material carefully. If something seems too good to be true, it
usually is. Be sure you understand what you are buying before signing any
forms. Don’t give out bank or credit card information until you are sure you
want to purchase the product.
- Determine exactly what the product covers. Many unauthorized health
plans and sharing programs have an extensive list of conditions that are not
covered. Others will say that no promises are made that any claim will be
covered. Be sure you know what you are getting for your monthly payment or
- Consumer protections do not apply to health discount plans,
unauthorized health benefit plans and “sharing” programs. The
Mississippi Department of Insurance has jurisdiction over licensed and
authorized health insurance carriers and can assist consumers in resolving
complaints related to these entities only.
- Since many of these products are marketed through the Internet,
observe the usual safe shopping tips. When purchasing online, be sure the
site is secure and that the company’s privacy policies are clear and
accessible. Be sure to locate a phone number and an address for the
company and keep copies of everything you submit. If you think you are
interested in the product, print copies of the material on the Web site for
These ‘red flags’ may indicate that the program being offered is not a health
benefit plan and may not be “creditable coverage.”
- The cost is much lower than health insurance premiums would be and
applications are accepted with little or no underwriting for medical
- The material mentions a “stop-loss” insurer or claims to be exempt from
state regulations because it is an “ERISA” or “union” plan.
- The plan excludes or singles out those with particular medical
conditions or lifestyle choices.
- The amount of time listed to pay for medical services is more than 30
days. As a point of comparison, under Mississippi law, a licensed health
insurance company must pay a “clean” electronic claim (one requiring no
additional information from the provider) within 25 days. Unauthorized or
unregulated plans may claim to pay within 60-90 days. In at least one case, a
sharing plan took six months to pay a valid claim. A lengthy delay in payment
may indicate financial instability.
- The material lists a number of disclaimers, including one stating that
health care “needs” are paid voluntarily and no payments are
- A claim is made that there are no commissions or referral fees paid yet
the application asks you for the name of the person who told you about
the product. In some cases, consumers may receive a telephone call or
email solicitation with a link to the product’s web page.
- Your doctor or pharmacist has never heard of the product.
- The plan offers “benefits” unrelated to medical costs.
- Plan material may indicate that your name, address and health condition
would be shared with other subscribers of the plan.
If you have questions about a product or want to see if a company or agent is
licensed in Mississippi, please call the Mississippi Department of Insurance at
800-562-2957 and ask for Consumer Services or visit our website at