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MAINE BUREAU OF INSURANCE
34 State House Station
Augusta, Maine 04333-0034

Tel. (207) 624-8475 Fax (207) 624-8599 TDD 1-(888)-577-6690

Consumers Should use Caution When Considering
Medical Discount Card Offers
Discount cards are not subject to Bureau of Insurance regulation

March 24, 2006

Contact: Alessandro A. Iuppa, Superintendent
Tel: 207-624-8401

Augusta, Maine: The Maine Bureau of Insurance cautions consumers to carefully review offers they receive to buy medical discount cards. Medical discount cards are not insurance and therefore not regulated by the Bureau of Insurance. Consequently, it is important that consumers read the fine print and understand that these cards should not be considered a substitute for health insurance coverage.

Some insurers, pharmaceutical companies as well as other entities offer legitimate programs that provide discounts on prescriptions, dentistry, eyeglasses, and other health services. These discount cards, which are widely marketed over the Internet and may be distributed through fax machines, offer discounts in exchange for a monthly fee. However, since these programs are not insurance, they are not regulated in Maine and as a result, problems have developed with confusing or misleading advertising. Many times, a particular discount card program may have very few doctors in Maine who participate in the program. In addition, advertising for the cards may claim savings of up to 80% causing consumers to mistakenly believe that discounts will always reach 80% when in fact the discount can range from 0% to 80%. It is always a good idea to review the benefits that these cards offer before buying the product.

Fraudulent discount cards are also a problem. Some warning signs to look for that may indicate a discount card plan is fraudulent are as follows:

  • The discount plans are often advertised through spam e-mails, Internet pop-ups, or signs posted on telephone poles.
  • The company claims you can save a considerable amount of money on health insurance.
  • The company will not give you a list of providers until after you buy the discount card.
  • You are asked for debit or credit card information or a large up-front fee. Legitimate discount cards will not mandate large application fees or up-front costs.
  • Legitimate discount card issuers will state on all their marketing material “This is not insurance.”
  • The company uses high-pressure marketing and an extreme sense of urgency with phrases like “must act now,” or “one-time offer.”

Legitimate discount cards can be a helpful supplement to insurance coverage but they should never be considered a substitute for health insurance coverage. Since a discount program is not insurance, the time that the consumer uses the card counts toward time without insurance when determining whether pre-existing conditions are covered under health insurance policies.

Information is the best defense. Review promotional claims carefully and contact the Maine Bureau of Insurance to answer any questions you may have about what you are buying.

The Bureau of Insurance is part of the Department of Professional and Financial Regulation which encourages sound ethical business practices through high quality, impartial and efficient regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can reach the Bureau through its web site at www.MaineInsuranceReg.org; by calling 800-300-5000 in state; or by writing to Bureau of Insurance, 34 State House Station, Augusta ME 04333.

Last Updated: December 6, 2007