California regulators are now requiring discount health plan providers to obtain licenses to conduct business within the state. The state has already licensed three providers. The new licensing regulations come in response to the number of complaints the California Department of Managed Health Care has seen over the past four years about the discounted health plans according to the Los Angeles Times.
Consumers complained that the discount plans exaggerate the benefits included when it comes to savings and health care provider networks. They are also blindsided by the fact the discount plans accept members with pre-existing medical conditions but only cover a percentage of total health care costs. At times, discount plans don’t provide any coverage, depending on the terms and health care services needed.
Shoppers need to be careful of these discount plans. It’s very important to realize that these types of plans are not like regular health insurance nor should they replace lost insurance.
But because California currently has 7 million uninsured residents, many are desperate for any type of “coverage ” even if it’s not right for their needs. The danger with discount health plans is that they seem affordable at the time of purchase, but often result in enormous medical bills.
Maybe the new regulations are a good thing. Discounted health plans are offered in every state but only 21 states require licenses leaving a lot of room for improvements to be made across the country. If you’re considering a discount health plan, you should consult first with a licensed agent to first explore your individual health insurance options.