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.

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 membership fee
• 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 future reference.

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 conditions.
• 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 guaranteed.
• 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 contact the Mississippi Insurance Department or use the Licensing Search Page. Please see our Request Assistance Page for information on how to contact us.