Health Benefits that Don't Pay

There is a new scam becoming a major problem for many people in low paid industry or service positions throughout the Country. These are health benefits which are really not insurance and usually do not benefit any of the employees who think they are getting health coverage. Often they are called Discount Health and Dental Benefits.

Here is how these scams work. An employee is told that they get health and dental benefits with their jobs. This sounds great as many of these employees have never had their own health insurance before. They do not realize that this is far from bona fide health insurance. Yet they have to pay a monthly fee like an employee with real health insurance does.

They are given a booklet, which if they get sick or need dental work, they have to consult and find a participating Doctor of Dentist. They then call the Doctor’s office to make an appointment. When they go to their appointment, they have to sign a sheet given by the Doctor’s secretary that they are responsible for the full amount of the office visit minus the amount covered by the plan. Still this is standard operating procedure for most health care providers. Many health insurance plans such as major medical or PPO coverage often require the patient to pay 20% co-pay while the plan pays 80%. HMO plans often have a fixed co-pay per office visits which may range from $5 to $25 to be paid by the patient.

Unfortunately, the discount plan often only pays 10% of the office visit cost. A Family Medicine Practitioner or Internist charges about $125 for a first office fist. This means the patient must pay $125 – $12.50 or $112.50 for the office visit. The patient did not expect to have to pay this much money. In fact some Doctors bump up the office visit fee for people using the discount plan. They may charge $150 instead of $125 so that the patient is actually paying $150 – $15 or $135, $10 more than a person without the medical discount plan or any other form of health insurance.

Sounds like a rip off yet? In fact it is. The employee’s discount plan actually pays the Doctor nothing at all. They help a Doctor build up their patient numbers by listing them in their plan’s book. The Doctor receives no money from either the discount plan or the employer. The fact is that this is not insurance at all. The employer gets to say they offer health benefits, when in fact they only sound like they offer health benefits.

Imagine how much the employee has to pay if they find themselves in a Hospital. Few Hospitals accept the discount plan so they have to pay $60,000 for an operation, and care which costs $60,000 for a cash patient. If they do find a Hospital which accepts the discount plan, an unlikely occurrence, they may only have to pay $54,000. This is still beyond most people’s means.

My Daughter worked for a hotel chain and had this phony health benefit. When my wife and I first heard she had health coverage, we were overjoyed. Then my Daughter had to go to a Doctor and we found out that what she had was a bogus benefit.

Drugs were only covered by the same discount. The drug store offered their own plan for free to attract patients. Their free plan gave everyone who signed up for it 25% off, a much larger discount than her employee health care plan which she paid $25 per month for.

This is just outrageous to me since it makes people feel they are protected but if they get sick, they have to shell out much more than they expected. These plans should come with big warning labels on their booklets stating that their level of protection is minimal. At least then the employee can look for another job which carries real health insurance.