What Consumers Need to Know
About Discount Medical and Discount Drug Plans
In Maryland, there are two basic types of discount plans available: Discount Medical Plans and Discount Drug Plans. These plans may be structured to look like insurance, but they are not insurance and don't pay any of your health care costs. Instead, discount plans give plan members access to a group of providers of health care services and supplies on a discounted basis.
Discount Plans: Are They Right For You?
Before you become a member of a Discount Medical Plan or Discount Drug Plan, it is important to understand how the plans work and how they can be used. You also need to understand exactly how much money a discount plan will save you and how much it will cost to join.
What Is A Discount Plan
Discount plans can be beneficial to consumers looking to save money on health care costs. These plans offer savings to plan members on various health care goods and services such as prescription drugs, doctor visits, eye glasses, vision care, dental services and lab tests through arrangements between health care providers and the organization offering the discount plan.
How Discount Plans Work
Discount Medical Plans contract directly or indirectly with health care providers or provider networks to provide medical services at a discount to plan members. Similarly, Discount Drug Plans contract with providers or networks to provide pharmaceutical supplies, prescription drugs, medical equipment and other supplies at a discount to members.
Each discount plan must provide a plan member or plan member's family a discount card. Members present the card to their providers to receive discounted services, supplies, drugs and related care. The discount card includes:
- A statement that the discount medical plan or discount drug plan is not insurance;
- Information identifying the discount medical plan organization or the discount drug plan organization and/or the provider networks that participate with the discount plan; and
- The telephone number that the plan member may call for assistance.
A discount medical plan organization or a discount drug plan organization is required to notify a plan member when there is a material change in plan benefits or the information contained on the card. If the information on the discount card changes, the discount medical plan or the discount drug plan must reissue the discount card(s).
What You Should Know About Discount Plans
Discount plans are NOT health insurance. Therefore, some of the protections that you receive when changing health insurance companies do not apply.
Discount plans may not:
- Restrict access to discount medical plan or discount drug plan providers, including waiting periods and notification periods;
- Refuse to modify the method of payment for membership in a discount medical plan or a discount drug plan on request, unless a specific method of payment is required as a term of the discount medical plan or the discount drug plan and was agreed to in writing in advance;
- If membership is billed monthly, impose a financial penalty for termination provided that 30 calendar days' written notice of termination is provided;
- Continue electronic fund transfer as a method of payment more that 30 calendar days after a written request for termination of electronic fund transfer has been made; or
- Require the member to notify more than one entity that the electronic fun transfer should be terminated.
- If applicable, discount plans must inform you if a nominal fee associated with enrollment costs will be retained by the discount plan organization, if membership is canceled within the first 30 calendar days after the effective date of enrollment.
- Hospitals in Maryland DO NOT accept discount cards. Under Maryland law hospitals must charge all consumers the same amount.
If you question whether something is a discount plan or an insurance plan, and whether the discount plan is properly registered with the State, contact the Maryland Insurance Administration at 800-492-6116.