STATE regulators are cracking down on discount health plans, which have become increasingly popular as rising insurance premiums cause employers to stop offering traditional health coverage.
The discount plans, which involve enrollment fees of $100 or more and monthly fees of up $60, offer individuals discounts on physician and dental visits and on pharmaceuticals by funneling business to participating providers.
However, investigators with the state Department of Managed Care say they have been inundated with complaints from consumers who sign up for the cards but then find that listed providers aren't even aware of the plans.
"Their ads are full of misrepresentations," said Amy Dobberteen, the department's chief of enforcement. "We are investigating all unscrupulous health plans."
The department estimates there are at least a couple of dozen such plans operating in the state, though the exact number is not known as the plans do not have to register with the department since they are not technically insurance companies. (Insurers accept risk, while the plans provide a discount without bearing any risk.)
As part of the crackdown, the department issued cease-and-desist orders to Platinum Health Plus, a Miami-based plan that bills itself as the largest in the nation, and Family Health Plan, a Houston-based company. The orders prevent the plans from marketing their services.
Officials with Family Health Plan could not be reached for comment. A spokesman for Platinum Health issued a written statement saying that it is working with the department to rectify any of the alleged problems.
Staff reporter Laurence Darmiento can be reached at (323) 549-5225, ext. 237, or at ldarmiento@labusinessjournal.com.
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