Limited Medical Plans -- What You Should Know

You've probably seen the signs for low-cost prescription drug cards, discount dental/vision programs, subsidized doctor's office visit, or $500 hospital benefits. These same flyers and ads also tell you your acceptance is guaranteed. They promise great savings on all kinds of medical services.

The signs and flyers and marketers are everywhere - on telephone poles, in your company mail, on your desk when you get back from lunch, under your windshield wiper blade, or stuck in your front door when you get home.

Are these plans for real? Are they a good idea?

First of all, keep in mind most of these plans are not insurance. You need to read the fine print to see what services are excluded from coverage, and whether your service provider is included in the benefit plan. Once you are comfortable with any limitations, here's the next thing to check out.

Contact your local Better Business Bureau (BBB) and the national BBB (at www.bbb.org) to see if there have been complaints about or issues with the company. Then find out what state the company is “domiciled” in and make sure it is in good standing. Ask around to see if others know about the company. Check the plan out with your state Division of Insurance to make sure there are no outstanding issues or complaints. Finally, do an Internet search on the company name to see if there's any news headlines or information out there you should know.

What do these plans cover? Who offers them? Are the coverage types and limits going to meet your needs and address your concerns?

Most of these plans are the result of negotiated discounts with groups of service providers, and may even be offered by the service providers themselves.

An example of a provider-offered plan is a dental plan with a chain of offices where you pay an annual fee to cover one or two complete check-ups and exams and x-rays, and then also get significant discounts on other services such as fillings and crowns.

Other plans offer you a set amount of coverage for a number of services each year, up to a fairly low maximum amount. For example, you may get 2-4 office visits per person, with a participating doctor, included for your monthly fee. In addition, you may also get $500 per day for a few days toward hospital stays. The maximum coverage amount is chosen by you, but is usually between $2,500 and $5,000 per year, and may only apply to accidents, not illness or maternity, for example.

If your employer does not offer health insurance and you cannot obtain it (or afford it) on your own, these discount or pre-pay programs may be worth looking at, but tread carefully. Many are legitimate, but some aren't. Always check the plan out before sending money, and never give your social security number or checking/banking/credit card information out to get the plan in place.